And following some others, I believe that the difference between “application” and “understanding” is one of the simplest ways to describe the differences. It’s very largely the same theology that’s being discussed.
In comments below, Jim Pemberton gave one of the best summaries I’ve seen of where Luther fit into the overall Reformation:
There is certainly much to appreciate about Luther's key role in the Reformation, but he was a stepping stone. His own theology changed throughout his life. I find it interesting, indeed telling, that our idea of reformed theology today differs from his purpose of reforming the RCC in that he never wanted to break away from the RCC. He only wanted to reform the theology and he labored to reconcile much of the RCCs ecclesiology with what he was discovering under the idea of sola scriptura. But since the ecclesiology he was trying to reconcile was still a product of sola ecclesia, I wager he had more to reconcile than he ever got around to. Given another lifetime, he may have discovered this conflict and given the rest of his thinking over to sola scriptura.
Luther wasn’t in a mood to throw things out.
Lutheranism arose out of Martin Luther’s personal struggles, which, at their earliest, arose in answer to the question “how am I made right with God?”
Not long afterward, Luther’s theology seemed to evolve out of a pastoral desire to teach his followers “how should we then live?”
It was his experience in the monastery that he sought to “reform” in some way, and bring it to the common folk.
In another comment thread, the Lutheran writer Nathan Rinne described it this way:
We view justification differently. These differences exist not so much because Luther is hard to understand, but rather because justification as envisioned by Luther cannot be understood apart from its practical application,
In that regard, Luther’s Small Catechism (1529) for example is very personal. The admonition “the head of the family should teach [these things] in a simple way to his household” is repeated throughout the work.
* * *
On the other hand, Calvin famously began his Institutes with the following statement:
Nearly all the wisdom we possess, that is to say, true and sound wisdom, consists of two parts: the knowledge of God and of ourselves.
He was seeking to understand.
His treatment through the four books of the Institutes then follows a systematic pattern, through: “The Knowledge of God the Creator”, “Knowledge of God the Redeemer in Christ”, “The Way in Which We Receive the Grace of Christ”, and book four, “External Means” and “The Society of Christ”.
Later Reformed theology tended to follow this pattern of stepping back and looking at the “big picture” of Christian theology in a logical and comprehensive way, following the general pattern of “prolegomena”, then “Theology proper” (the study of God, generally), creation, sin, Christ and redemption, and the church.
* * *
This comports nicely with a blog post from a while ago that described the major differences among the earliest churches of the Reformation as if “church tradition” were a “junk drawer”. It went like this:
We all have a “top dresser drawer” into which we throw everything that there's no other place for. Over time, it just gets full of all different kinds of things. In church history, “tradition” kind of filled up the way that drawer does. And there were four different ways that the Reformers dealt with that drawer.
The Lutherans went through the drawer, looking for things that weren't Biblical. Lutheranism took out the things that weren't biblical, but they left everything else in there.
The Reformed took the drawer and dumped everything out on the bed. Then they went through all that stuff, checked it over carefully, and put back the things that were Biblical.
The Anglicans opened the drawer and took out one thing, called "the Pope," and put back in one other thing, called "the Archbishop of Canterbury." (This was probably the least analogous parts of the metaphor, given the 39 articles and all.)
The Anabaptists took out the whole drawer, dumped everything in the trash, and lit the trash can on fire.
Luther didn’t want to throw anything out.