From “Usury” to “Financial Alchemy:” Martin Luther’s Economic Writings Revisited

Abstract

This paper deals with the economic writings of Martin Luther, especially his critique on usury, against the backdrop of the recent financial crisis. It demonstrates that Luther developed several arguments that are still relevant to current problems regarding financial markets. The most remarkable points in Luther's critique are his warnings against contingency, fraudulent activities and power abuse, and his demand for personal liability of investors. Today, Luther's arguments should be understood as a call for reform to improve the financial sector's functioning, especially regarding its task to provide services for consumers and other businesses in a proper way.