Martin Luther’s Theology of Antitrust

John Ehrett
Friday, June 3rd 2022

Antitrust—the framework of laws and policies developed to prevent one private actor from monopolizing a given market or sector of that market—is typically the domain of specialist lawyers and economists. In years of reading and study, I’ve seen only one work connect the dots between this field and theology. And no doubt for most antitrust experts, even posing the question is inapt—about as incoherent as asking about the theology of BMW engine maintenance.

But such a judgment is premature. After all, regimes of antitrust law embed a particular set of value judgments about the permissible conditions for acquisition of certain forms of property—property that, from a Christian vantage point, is always ultimately a gift of God. And the Christian tradition hasn’t been silent on such issues, even when they become as granular as antitrust policy.

Consider, to name just one example, one of Martin Luther’s most fascinating—and least-examined, at least by Lutherans—texts: the 1524 pamphlet On Trade and Usury. In this short treatise, Luther canvasses a wide range of economic issues and practices—many of which still occupy scholars today—and renders swift theological judgments on them. And it’s here that Luther’s views on monopolies, and their prevention, come to the fore.

To begin with, Luther flatly condemns monopolistic aspirations by merchants—that is, any of their efforts to “buy up altogether the goods or wares of a certain kind in a city or country, so that they alone have such goods in their power, and then fix prices, raise and sell as dear as they will or can.” For Luther, a just price isn’t simply what the market will bear; such an approach is “false and unchristian.” Hence, civil authorities “should check and punish [monopolistic behavior] if they wish to fulfil their duty.”

But significantly, Luther doesn’t ground this criticism in narrowly utilitarian terms. His critique, rather, is theological: “such merchants act just as if the creatures and goods of God were created and given for them alone, and as though they might take them from others and dispose of them at their fancy.” On Luther’s view, the sin that inheres in monopoly is the aspiration to exercise absolute authority over that which was originally given by God as common. And this sin, like other public sins, can be checked by civil authorities—by what we would now term “antitrust enforcers.”

This critique is expanded in Luther’s denunciation of “combinations”—over-consolidated entities operating in a particular market or set of markets, who enjoy monopolistic control over more than just a single good. While condemning combinators for their efforts to act “as if they were lords of God’s creatures”—a move that parallels his prior attack on traditional monopolies—Luther then goes on to raise two new theological issues.

First, Luther frames the destructive impact of combinations on other market participants—that is, competitors—as a distinct theological problem in its own right. According to Luther, a combinator engages in monopolistic behaviors “without shame, raising and lowering prices at pleasure, oppressing and ruining smaller dealers as the pike does smaller fish in the water.” This, in turn, reflects an internal attitude in which the combinator is “free from all the laws and obligations of faith and love.” Implicit in Luther’s argument here is the belief that that a potentially dominant market participant has a moral obligation not to drive his competitor to utter ruin.

Second, Luther argues that the economic stagnation produced by combinations is itself a violation of God’s created order. He begins this line of attack by noting the possibility of a combination cross-subsidizing its own lines of business to ward off downside risks: “To-day they raise the price of ginger, next year saffron, so that the bend always fits into the angle and they have no loss, harm, nor risk; but if ginger fails or is spoiled they make it good on saffron, so that they are sure of their profit.” The persistent economic stability this cross-subsidization engenders, Luther argues, “is contrary to the fashion and nature not only of merchandise but of all temporal goods, which God means to have subject to risk and uncertainty. But [combinators] have devised that through risky, uncertain, temporal wares they obtain sure, certain, and constant profit.” Luther’s underlying principle here seems to be is that there is a theological value to the possibility of market uncertainty, one that counsels against allowing extensive cross-subsidization of lines of business by a dominant firm. And what is this theological value? Alas, at that point Luther is silent.

There are, of course, certain extreme circumstances in which large-scale resource buyups may be permissible. On this point, Luther turns to the closing chapters of the Book of Genesis (Gen. 41–47), which describe the patriarch Joseph’s actions to acquire large quantities of grain during a great famine in Egypt. For Luther, prudent civil authorities ought to “gather the surplus” of economic productivity as a hedge against catastrophe, as a matter of “good Christian foresight on the part of the community for the benefit of others”—insofar as this is not a matter of cronyistically taking “everything for themselves, like these merchants.” This gathering of the surplus, in short, does not involve a crowding-out of ordinary commerce, but rather a prudential safeguard against emergencies.

Taken together, Luther’s “theology of antitrust” represents an economic orientation very different from the currently dominant legal approach to antitrust—an approach committed to analyzing corporate behavior in light of a “consumer welfare standard” that focuses narrowly on the cost of goods and services paid by a consumer. Indeed, by suggesting that a market actor has moral obligations to his competitors, obligations which ought to restrict the range of competitive practices in which he engages, Luther’s approach is positively radical.

Among academics and historians, the Protestant Reformation has often been interpreted as laying the groundwork for extractive capitalism and modern finance, most famously by sociologist Max Weber. Others have complained about the post-Reformation decline of formal proscriptions on usury, which led to the entrenchment of economic exploitation. But Luther’s On Trade and Usury represents a striking counterexample to that narrative, juxtaposing biblical exegesis and theological reasoning alongside decidedly “nonlibertarian” economic analysis. What’s more, its existence indicates that the possibility of placing theology into conversation with antitrust law and policy can’t be written off as a category error: at root, these disciplines do implicate one another in unique ways.

Of course, Luther’s approach to antitrust isn’t the sort of political program that could be dragged-and-dropped into contemporary legislation. Rather, it represents a different way of seeing, one that apprehends even the mundane features of business life through a theological lens. And Christians of all denominations would do well to take that orientation to heart.

John Ehrett is editor in chief of Conciliar Post, an online publication dedicated to cultivating meaningful dialogue across Christian traditions, and a Patheos columnist writing at Between Two Kingdoms. He is a graduate of Yale Law School and is currently pursuing a Master of Arts in Religion at the Institute of Lutheran Theology.

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John Ehrett
John Ehrett is an STM candidate at the Institute of Lutheran Theology and a Commonwealth Fellow at the Davenant Institute.
Friday, June 3rd 2022

“Modern Reformation has championed confessional Reformation theology in an anti-confessional and anti-theological age.”

J. Ligon Duncan, IIISenior Minister, First Presbyterian Church