The problem is not having rules, whether or not they are found in the Old Testament. The problem occurs when we let these rules get in the way of the fundamental truth of the Gospel.
Luther warned over and over again that human beings were prone to legalism. Legalism exists when people attempt to secure righteousness in God’s sight by good works. Legalists believe that they can earn or merit God’s approval by performing the requirements of the law. Luther’s polemic against legalism was grounded in his exegesis of the Pauline letters. He drew a correspondence between the Judaizers of Paul’s day and the Roman Catholics of his. Just as the Judaizers believed that they could gain righteousness in God’s sight by the works of the law, so too the Roman Catholics of Luther’s day were attempting to secure righteousness by observing God’s commandments. According to Luther the legalism of the Judaizers had manifested itself in the theology and behavior of mainstream Roman Catholicism in his day. Many Roman Catholic exegetes insisted that Luther’s exegesis was mistaken. They argued that the works of the law in Paul (Rom. 3:20, 28; Gal. 2:16; 3:2, 5, 10) referred to the ceremonial law alone, and thus they deflected the parallel between the Judaizers and themselves. Luther struck back by arguing that works of law in Paul referred to whole law, both ceremonial and moral. Paul did not merely criticize the Judaizers because they wanted to impose the ceremonial law on Gentiles. He also attacked them because they compromised the fundamental truth of the gospel. The Judaizers were attempting to secure eternal life by virtue of their own works and goodness instead of trusting solely in the atoning work of Jesus Christ on their behalf. Their focus on good works inevitably led to boasting, for if eternal life is obtained by virtue of one’s good works, then the person who performs the good works deserves praise and honor for accomplishing such a remarkable feat. The true gospel, Luther insisted, is exactly the reverse. All the praise, glory and honor belong to God because he has effected our salvation. We can do nothing to merit or earn salvation. Faith gives glory to God because it receives the gift of salvation which he has provided.
This helps explain Luther’s uncompromising stance on the freedom of the will in his famous book The Bondage of the Will. Fallen human beings, according to Luther, are in bondage to sin. This means that they do not have any ability to do what is good in God’s sight. The idea that unregenerate human beings have the freedom to do what is good is a myth, explains Luther, for all people are slaves to sin (Romans 6). Slavery to sin does not mean that people are forced to sin against their wills. Neither God nor the devil puts a gun to our heads and says, “you must sin!” The slavery to sin which characterizes humanity expresses itself in a willing servitude to sin. When human beings sin, they simply carry out the desires in their hearts. Righteousness cannot be obtained by works of law because all human beings are born into the world as slaves of sin, condemned in Adam. They can never secure righteousness by performing good works, for they do not and cannot carry out the requisite works. As Paul said in Rom. 8:7-8, “For the mind that is set on the flesh is hostile to God; it does not submit to God’s law, indeed it cannot; and those who are in the flesh cannot please God” (RSV). The idea that human beings can obtain righteousness by works is the highest folly since we are totally dominated by sin and cannot perform the works required for justification.