Martin Luther Hated Capitalism


As legend has it, Martin Luther nailed the 95 Theses to the doors of the Wittenberg Castle Church on Halloween. In the spirit of the season, I thought it fitting to begin with a ghost story:

In the early 16th century a spectre haunted Europe — the spectre of capitalism. All the powers of old Europe had entered into an unholy alliance to summon this spectre: Pope and princes, Fugger and Eck, Bankers and German priest-spies.

This week marks the 500th anniversary of Martin Luther’s posting of the 95 Theses and, perhaps providentially, the the 150th anniversary of the publication of Karl Marx’s Capital. Last week was the 100th anniversary of the Bolshevik Revolution. It might surprise you to know that these events have some important themes in common.


One of the most ignored aspects of Luther’s theology is his economic ethics. Luther wrote a surprising amount on the evils of conspicuous consumption, usury, and trading practices that would become part and parcel of capitalism. In 1519 he preached a Sermon on Usury, which he expanded into a treatise entitled, On Trade and Usury in 1524. In 1540, near the end of his life, he wrote yet another treatise: An Exhortation to the Pastors to Preach Against Usury. His harsh words against the bankers and merchants of his day rang through his sermons on Matthew 6, his exposition of the 7th Commandment (“thou shalt not steal”) in both his Small and Large Catechism, and in his letter To the German Nobility.

Karl Marx would later quote Luther’s economic writings with approval. He particularly enjoyed An Exhortation to the Pastors to Preach Against Usury, and at one point called Luther, “the oldest German political economist.” Luther lived in the transition period between feudalism and mercantile capitalism. What he saw on the economic horizon — that haunting spectre — troubled him. As an economist living well into the age of capitalism, Marx was able to explore deeper and offer insights the Reformer could not have seen. Nevertheless, these two radical visionaries saw the same inherent problems in the foundations of the burgeoning system. I’m obviously speculating here, but given Luther’s characteristically savage attacks on early capitalism, it’s hard to imagine that Luther would have had anything but respect for Marx’s stoic, surgical deconstruction.

(Though, to be sure, Luther would not have approved of Marx’s call for revolution. Luther, the ever-inconsistent theologian, ended up on the princes’ side of the Peasant’s Revolt and called for the slaughter of the peasants who fought for their freedom from exploitation. This is why Marx’s comrade, Friedrich Engels, was more a fan of Thomas Müntzer.)

Martin vs. Money

I admit that it’s a bit anachronistic to say that Luther hated capitalism, since capitalism did not yet properly exist. What Luther hated was exploitation. In On Trade and Usury he concedes that buying and selling are necessary for the distribution of necessities. Yet, he saw the practices of early capitalism as inherently exploitative. He wrote, “What good is there in trade? How can it be without sin when such injustice [greed] is the chief maxim and the rule of the whole business? On this basis trade can be nothing else than robbing and stealing other people’s property.”

What good is there in trade? How can it be without sin when such injustice [greed] is the chief maxim and the rule of the whole business? On this basis trade can be nothing else than robbing and stealing other people’s property.

In the Large Catechism, where Luther expounds on the commandment not to steal, the target of his ire is the overcharging merchants. These, he says, are far worse than the man who steals your wallet. We can lock our doors to prevent burglary, but we cannot avoid the marketplace where the real criminals lurk. Luther says he would rather be robbed by the “sneak-thief” than by the merchant. Even worse are the more powerful merchants and bankers: “Yes, we might well keep quiet here about individual petty thieves since we ought to be attacking the great, powerful archthieves with whom lords and princes consort and who daily plunder not just a city or two, but all of Germany.”

Long before Adam Smith wrote On the Wealth of Nations, Luther saw the profit motive at work. He saw traders adjusting their prices to match demand rather than the cost of production. And it sickened him.

Again, there are some who sell their goods at a higher price than they command in the common market, or than is customary in the trade; and raise the price of their wares for no other reason than because they know that there is no more of that commodity in the country, or that the supply will shortly cease, and people must have it. That is a very rogue’s eye of greed, which sees only one’s neighbor’s need, not to relieve it but to make the most of it and grow rich on one’s neighbor’s losses. All such people are manifest thieves, robbers, and usurers.

Elsewhere he says of the same practice, “Pray, is not that unchristian and inhuman conduct? Is not that selling a poor man his own poverty?”

Here, we see the heart of Luther’s frustration with capitalism. Adam Smith wrote that “it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” The central drive of capitalism is self-interest, the “virtue of greed.” Luther believed precisely the opposite should be true in a society that cared for its neighbors — that is, a society of Christians.

The rule ought to be, not: I may sell my wares as for as much as I can, but: I may sell my wares as much as I should, or as is right and proper. For your selling ought not to be a work that is entirely within your power and will, without law or limit, as though you were a god and beholden to no one; but because this selling of yours is a work that you perform toward your neighbor, it must be so governed by law and conscience, that you do it without harm and injury to your neighbor, and that you be much more concerned to do him no injury than to make large profits. But where are such merchants? How few merchants there would be and how trade would fall off, if they were to amend this evil rule and put things on a Christian basis!

Theological Foundations of Anti-Capitalism

Luther’s economic ethic is rooted in his theology found in The Freedom of the Christian: “A Christian man is the most free lord of all, and subject to none; a Christian man is the most dutiful servant of all, and subject to every one.” To be a Christian, for Luther, was to serve others. He was convinced that a person could not live as a Christian and as a capitalist. It is absolutely antithetical to Christ’s command to love your neighbor while withholding supply to increase demand, while driving down costs to put another merchant out of business, or while charging interest on loans. 

A Christian man is the most free lord of all, and subject to none; a Christian man is the most dutiful servant of all, and subject to every one.

As a theologian rather than an economist, Luther saw no system that could replace capitalism. He tossed around the idea of price-setting by the state, but ultimately thought it too impractical. Conceding that the system of trade must continue, Luther had (broadly speaking) two thoughts on how to combat the inherent greed and exploitation of capitalism:

First, Luther believed that Christian merchants could transform society by conducting business in a different way — a Christian way. He outlines Christian business principles in On Trade and Usury. It is worth noting that these principles stand in stark contrast with the principles of capitalism. For example, a Christian who loans ought not to expect anything in return and ought not to charge interest. A merchant selling products ought to take great pains to calculate the cost of production (supplies, risk, and labor) and to sell it for exactly that. Luther admits the difficulty of calculating such subjective line-items, and says that sometimes you may accidentally sell a product for more than its worth. This is why we pray for God to “forgive us our debts,” he says. What’s more, we will occasionally accidentally sell our products for less than they are worth, so the scales will eventually balance out.

Secondly, Luther believed in heavy governmental regulation. He expected Christian merchants to act differently, but admitted that few Christian merchants exist. The majority of merchants were not Christians and thus not free to live as the servants of all. So, he calls on the state to oversee the regulation of business in order to protect the system from becoming too exploitative.

Always Reforming

There is a reason Luther’s anti-capitalist legacy has remained in the shadows, particularly in American Christianity. There is a reason Luther’s sermon, An Exhortation to the Pastors to Preach Against Usury has remained untranslated. As Reformation scholar Carter Lindberg puts it, “Perhaps Luther’s critique of capitalism has been neglected because there is a sense in which exegesis is the art of seeing, and the cataracts of capitalist ideology and its theological complicity blur our reading of Luther."

American Christianity, like the Roman Catholic Church of the 16th century, has found a new god. A god who allows us to exploit our neighbors, to forsake the poor, to destroy the planet. When is the last time you heard a sermon against unjust business practices? When is the last time you heard a pastor say that usurers ought to be excommunicated? How many people in your church would leave if your pastor condemned capitalism?

The tables have turned in the Protestant and Catholic world. Evangelicals made the man who literally wrote the book on how to exploit others the most powerful man in the world, while Pope Francis rails against the exploitation of capitalism. It is not enough to denounce Donald Trump (though, too few will do that much). We must denounce the system that created Donald Trump.

The results of capital accumulation are in: the planet is deteriorated, the poor are starved, and the workers are exploited. The average CEO makes 271 times more money than the average employee. The American government continues to deregulate businesses that abuse the planet and employees. GDP skyrockets as wages remain stagnant for decades. We are swimming in enough wasted food to feed the planet, and enough empty houses to shelter us all — but caring for your neighbor doesn’t make a profit.

Luther was right. You cannot be a capitalist and remain a faithful follower of Jesus.

Luther was right. You cannot be a capitalist and remain a faithful follower of Jesus. The system demands that you put your own needs before those of your neighbor. Mammon’s commandments start the same way as God’s: “You shall have no other gods before me.”

Luther fought the abuses of the Roman Catholic Church, many of which the Church acknowledged and addressed. If Luther were around today, I have a feeling he would be less concerned about the priests Rome than the priests of America. We have failed to speak prophetically on behalf of the poor and against the rich. The question remains: Will we be reformers for the church today? Will we heed Luther’s exhortation to preach against the usurers or will we continue to give them power?


Tylor Standley

is a writer and co-host of Podcastica Patristica. He is co-author of Divine Providence: A Conversation and author of The Separation of Church and State: Capitalism and the Christian Conscience.