1 John and assurance of faith

The question I get asked perhaps more than any other is regarding the first epistle of John. 1 John has often been used by Calvinistic preachers as a test of the genuineness of one's faith. The mode of thought is this,
"am I really a Christian? I am baptized, go to church, partake of the Supper, pray, etc. but none of this matters if I don't have faith. Well how do I know if I have true faith? True faith produces works, therefore I must look at my works. However, I see non-Christians who do seemingly nice things, so I must see if my works are better than theirs by looking at my affections and motivations."
1 John is then the proof that this is a Biblical method of attaining assurance. So how do I as a Lutheran, who is always telling people to look to their baptism, and the work of Christ for assurance interpret this book? Doesn't it point people to their works to gain assurance of true saving faith?

In short-no I don't think so.
First, remember that John begins his epistle by stating that "if we walk in the light, as he is in the light, we have fellowship with one another, and the blood of his Son cleanses us from all sin. If we say we have no sin, we deceive ourselves, and the truth is not in us. If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness. If we say we have not sinned, we make him a liar, and his word is not in us." (1:7-10) Before allowing his readers to assume that Christians are expected to live a sinless life, John reminds his readers that they are simul iustus et peccator. This serves as a corrective for how his later words could be misconstrued.

John does then begin to write about the necessity of works in the Christian life. (yes, works are a necessary result of saving faith) He states, "whoever says 'I know him' but does not keep his commandments is a liar and the truth is not in him." (2:4) I propose that John does not do so to tell Christians to judge their works to gain assurance of saving faith, but to continue in repentance after one is in the faith. It was characteristic of many early gnostic groups to promote licentiousness living. Salvation is attained through knowledge, and through escaping the physical world. Therefore whatever one does with the body is irrelevant. Perpetual unrepentant sin was not a barrier to the soul's salvation. John's emphasis on the physical nature of Christ (his language of seeing and touching Christ, or his insistence on Jesus coming in flesh for example) along with the antinomianism he is fighting is evidence that he is battling early proto-gnostic groups. Thus John is not writing to doubting believers that they might have a "test" for the genuineness of faith, but warning Christians against the early gnostic heresy.

Look for example at the second chapter. In verses 7-11 John tells his readers of the necessity of love in the Christian life. After he does this, he does not then tell his readers "see if you measure up" but something very different. He writes, "I am writing to you, little children, because your sins are forgiven for his name's sake." He does not say "so that you may know if your sins are forgiven", but "because your sins are forgiven." He then mentions that he is writing to those who "know him", and "have overcome the evil one." This is a use of the indicative and imperative.

John, like the rest of the New Testament authors, assures his readers that through confession of sin and repentance they are forgiven and loved by God. However, he is warning that those who live unrepentant lives, deny the flesh of Christ, and hate their brothers are not of the fold. As Luther's first of the 95 theses stated "the entire life of the Christian is one of repentance." John is warning his readers against falling away from the true faith into this gnostic heresy, adopting licentious living and denying the humanity of Christ which he refers to as the "sin that leads to death." (5:16)

Cling to the promise that those who confess are forgiven, and don't fall fall away from repentance, the church, and the doctrine of the gospel. That in short is the message of 1 John.