It is this understanding of the contrast between the old and the new man which constitutes the difference between Luther and all pietism. In the pietistic preaching of conversion and sanctification the new man is identified with the converted man. The new man is himself the real, psychologically changed, new individual which the conversion has produced in man and which sanctification has continued to establish. According to this view, the new in the converted man is a psychological reality, a legal righteousness. According to Luther the “new” in the new man is the living Christ himself who as alien righteousness classifies the whole old man, including both his conversion and sanctification, as flesh and old man, if it is not covered by the alien righteousness of Christ. In the pietistic preaching of conversion, the struggle between the old and the new man is a struggle between to different strata in man, the lower strata which comes from the life before conversion and the higher strata which comes by the life created by conversion. The struggle between the old and the new man is in Luther a struggle between Christ truly present in faith and our whole real self, including both the lower and the higher strata, both the converted and the unconverted parts of man. For the pietist neither the old man nor the new man is the whole man, but each is a part of man. According to Luther, one cannot understand what the new and the old man are until it is understood that each one of them in the strictest sense is the whole man.
However, this does not mean that Luther denies the presence of real works of grace in the soul. Luther sufficiently emphasizes that faith and the new man live and move in praise, prayer, and the works of the vocation to which man is called. But empirical piety is not in itself the new man (as pietism holds) nor is it our righteousness before God; it is only a fruit of the Spirit, an expression of the new man. Therefore it presupposes faith and the new man. In the very moment man as a whole man is flesh and not Spirit, in the very moment that man seeks his own, empirical piety is changed into self-righteousness, to a merit by which the sinner tries to justify himself before God, that is, to the fundamental sin which is pride. No quality of the soul whatever, no religious experience at all, no pietistic conversion, for example, possesses in itself a definite value before God. Its value in every moment depends (as do all other human qualities) upon man’s actual attitude to god as a person and as a while man. If a man is sinful, then his other qualities are all sinful. If a man as a person is righteous, is Spirit, that is, if he in that very moment is leaving all his own in favor of Christ’s alien righteousness, all his good qualities are the fruits of the Spirit, and his sins are forgiven and removed, because Christ’s alien righteousness covers man. If man as a person is flesh, that is, if he at that very moment is seeking his own, then all his qualities, including the good ones, are the fruits of the flesh. His sins are then without the forgiveness of Christ because the egocentric man in his flesh pushes Christ away and wants to be just in himself. In this case his ethical and religious qualities become merits by which he seeks to cover his own sins and be just before God; that is, they become the sophisticated sins of pride. This self-same empirical quality, for instance a pietistically understood conversion or sanctification, may in the same man in one moment be the fruit of the Spirit, as when in faith he leaves all his own (including this state of conversion or sanctification) in favor of the alien righteousness of Christ, when he lives trusting solely in the pure mercy of God and therefore views all his own religious and ethical qualities, if he is able to find any such at all, as the undeserved gifts of God. But in the next moment the same empirical quality, the same state of conversion and sanctification, may be the fruit of the flesh, as when he seeks his own and thereby changes this real quality from being the undeserved gift of God to being his own appropriation, by which he justifies himself before God and man….
How far removed this presentation [of Karl Holl and R. Seeberg] is from Luther thinking is revealed by the fact that for these scholars the progress of sanctification is identified with a real progressive process of justification. Luther speaks both of empirical piety (faith, which is man’s righteousness before God, and in which man lives and moves in real praise, prayer, and work) and of progress in sanctification (the Spirit becomes more and more master over the flesh). But in Luther these two lines of thought are not so blended that the progress of sanctification can be forthwith identified with the increase in empirical piety as is done in Holl’s and Seeberg’s interpretation of Luther. In Luther empirical piety is always ambiguous, It may in every moment be either an expression of the Spirit or of the flesh, according to whether the man in that particular moment is either Spirit or flesh. Therefore it is impossible to speak of an unambiguous growth in the plan or real justification. When Luther speaks about the progress of sanctification, he thinks of something entirely different. He thinks of the fact that man on the way between baptism and resurrection constantly and anew takes leave of himself to take refuge in Christ’s alien righteousness. In this refuge of faith in Christ, man is Spirit, new man, and all his past life up to this moment is at once considered as flesh, as old man. In this manner the Spirit, who knows only Christ’s alien righteousness, is constantly struggling against the flesh, which wants to hold on to its own past life as an appropriation, its own righteousness. In the resurrection man shall be completely Spirit. Then the Spirit shall no longer struggle against the flesh. But on the way between baptism and resurrection man is Spirit and flesh. But the closer man gets to resurrection, the more the old man is destroyed and annihilated, and the new man, which has only Christ’s alien righteousness, is the only possibility left. Therefore sanctification is a constant progress, a growing mastery of the Spirit over the flesh. But this progress is not the same as the increase of empirical piety. For empirical piety is ambiguous. It may constantly be qualified in two ways, and therefore so may its growth. The progress of sanctification is not, as is the increase of empirical piety, an object of psychological observation, but an object of faith and hope. It is not evident to oneself and others, but it is hid with Christ in God.
Regin Prenter, Spiritus Creator, translated by John M. Jensen, pages 67-70