Martin Luther and the Making of the Modern Economic Mind

Martin Luther has, in the modern economic as well as historian’s literature, often been portrayed as a mediaeval ignoramus helplessly shouting against the forces of modern capitalism, with little meaningful economic insight or contribution made to modern economic reasoning. In my paper, I would like to challenge this view. A first section provides a brief sketch of the evolution of economic knowledge in Europe during the centuries of capitalism’s ascendancy, 1250s–1850s. I would like to suggest that what today is claimed as having been the past “mainstream” does not necessarily correspond to what the mainstream way of thinking about the market process really was in the past or the centuries of European capitalism in its ascendancy, 1250s–1850s. A second section then discusses the intellectual origins of Martin Luther’s theology and market theory in the light of the remarks made in section one. It argues that to fully understand Luther’s economics also means we have to engage with the origins of his theology, not only because his economics and theology were intrinsically related and built upon one another, but because in a historical context it makes little sense to analytically disentangle theology from economics. A third section provides a sketch of Martin Luther’s economics, also demonstrating how Luther fits into the genealogy of modern economic knowledge. The fourth section concludes.