ANSWER: Martin Luther was born in 1483 in the town of Eisleben, Germany. He is known for nailing his "95 Theses" to the door of a Catholic church on Halloween in 1517. His hope was that the church would change some of its practices and doctrines he felt were not right. The Catholics, however, did not appreciate Luther's criticisms (to put it mildly) and soon excommunicated him. His efforts, along with others, were the catalysts for what is called the Protestant Reformation.
Several religious and other kinds of encyclopedias offer various explanations regarding why Martin Luther (at least during part of his life) did not like the book of James. First, however, according to one Biblical Commentary, His opinion of the book (written in his preface to the New Testament) was as follows.
"St. John' Gospel and his first Epistle, St. Paul's Epistles, especially those to the Romans, Galatians, Ephesians, and St. Peter's Epistle - these are the books which show to thee Christ . . . Therefore, St. James' Epistle is a perfect straw-epistle compared with them . . ." (Basic Theology, article "The Canon")
The Believer's Study Bible states that Luther, at least for a period of time, thought that the book of James contradicted what (he believed) was the Apostle Paul's teaching that justification came by faith alone (article on the canonicity of the manuscript). The Bible Knowledge Commentary admits, in its preface to this Biblical book, that it was "well known" that Martin Luther had problems with this New Testament work.
Luther, according to the Holman Bible Dictionary, Disciple's Study Bible and other references, had the greatest difficulty with what James wrote about faith and works in the second chapter of his book. Some of the key parts from verses 14 to 26 which Martin Luther disagreed with are the following.
My brethren, what good does it do, if anyone says that he has faith, and does not have works? Is faith able to save him? . . . In the same way also, faith, if it does not have works, is dead, by itself. But someone is going to say, "You have faith, and I have works." My answer is: You prove your faith to me through your works, and I will prove my faith to you through my works.
But are you willing to understand, O foolish man, that faith without works is dead? Was not Abraham our father justified by works . . . Do you not see that faith was working together with his works, and by works his faith was perfected? . . . You see, then, that a man is justified by works, and not by faith only (James 2:14, 17 - 18, 20 - 22, 24, HBFV).
Luther (and Lutherans) believe that the only correct way to respond to God's plan of salvation, unlike what the book of James (and others) state, is to simply trust in his perfect love. What is known as works or obedience to God, to them, does not play a leading role in the salvation of the individual.
This has led to an often quote phrase regarding Luther and Lutheranism that it believes in "faith alone" as the means to be saved. Those who oppose this concept state that it lessens the responsibility before God that believers have to produce good works. The Lutheran rebuttal is that faith must be the sole foundation of a believer and that after it fully exists then good works will flow from it.
What comes immediately to mind is the correlation of Psalm 119 to Hebrews 11 that teaches we must put faith together with works (actions). It was by and through faith, according to Hebrews, that Abel, Abraham and others obeyed God (verses 4, 8). Psalm 119 extols the virtue of those who obey God's law, who keep his testimonies, who walk in his ways and who not only seek God will all their heart but also diligently keep his precepts (Psalm 119:1 - 4)!
A New Testament verse that refutes Martin Luther's teachings that you only need faith and that once you have it, works will follow, is in the book of Revelation. This Biblical verse says the life of the saints is one where they not only have faith in Jesus but also keep God's laws (Revelation 14:12).
The book of James also contains other verses regarding the basic way of life Jesus expects of a Christian that contradicts what Luther believed.
But the one who has looked into the perfect law of freedom, and has continued in it, this one himself has not become a forgetful hearer, but is a doer of the work . . . Pure and undefiled religion before God and the Father is this: to visit orphans and widows in their afflictions, and to keep oneself unspotted from the world (James 1:25, 27)
Those who are believers in God, if they want to worship him in undefiled purity, must not only keep themselves "unspotted" from the world but also do good works! This acceptable way of living a Christian life is not only supported in the Old Testament (see Isaiah 58:5 - 7, etc.), but was a regular theme of Jesus' teachings. It is primarily because of its sharp focus on works being a critical part of salvation that Martin Luther did not like the book of James.