Martin Luther's view of Christian liberty can best be summed up in this way; "A Christian man is the most free lord of all, and subject to none; a Christian man is the most dutiful servant of all, and subject to every one" (Luther, 1520). Luther balances Christian liberty with service by indicating that there are two natures within the man, the spiritual and the sinful flesh. They are combating each other, so these sort of paradoxes come into play, where one is both completely free and also a dutiful servant of all.
But of course Luther indicates that one cannot have anything, such as freedom or duty, aside from in Christ Jesus the savior. And there can be no hope or faith put in works to find a basis for liberty. Luther sees good works as those things which do not justify anyone before God, but are works that build toward the subjection of the fleshly nature to Christ. Also, he refers to fulfilling our call to please God in response to God's gift of salvation in Christ.
Martin Luther (1520) characterizes the joy of Christian liberty in this way: "Here is the truly Christian life, here is faith really working by love, when a man applies himself with joy and love to the works of that freest servitude in which he serves others voluntarily and for nought, himself abundantly satisfied in the fulness and riches of his own faith."
So Martin Luther views Christian liberty as being completely and totally justified in Christ Jesus from beginning to end by faith. And thus the Christian is completely free to do anything. But a real Christian will want to do good works and is under duty to do good works, but these works do not in any way threaten or improve their justification in Christ.
I would evaluate this in the following way: Obviously this is a ground breaking doctrine that changed how the entire world viewed salvation. But as a Christian who values holiness theology I can't help but feel that he neglects the importance of holiness, which makes holiness not just a shove in the back for a Christian, but a necessity, a requirement for a Christian. And thus though justification is by Christ alone, a laziness to live in sin is possible and would threaten the salvation of the one living this way. Luther's famous equation leaves no stark command to holiness, only a vague urge that you should do it, but leaves no requirement for it to be done. This is where holiness theology succeeds, in more than just encouraging it, but making holiness a requirement of the faith, one must live it out and cooperate with the Spirit in obtaining entire sanctification. Instead Luther and Calvinists after left only a vague stand to suggest that sinning must continue until death, an unbiblical position in my view. Holiness theology offers us this great divine window to see, "Yes, you can be free from sin in this life, yes you can be holy." This to me is the essence of the conclusion of Luther's equation. It is completed by holiness theology.
