Both you and Luther, in your reading of the Holy Apostle Paul, miss the import of the phrase "of the law" qualifying works.
The entire matter becomes clear when Our Lord's own teachings are included in consideration of the false dischotomy between the Apostle Paul and James:
Consider first Christ's reply to the rich young ruler--he commends him for keeping the law, but tells him if he would be perfect (and being perfect as Our Father in heaven is perfect is one of Christ's commands), he should go, sell all that he has and give to the poor, and follow Him. Christ does not say, "believe in me" or "have faith", but gives him concrete actions "works" to perform. But, they are not "works of the law", as the young ruler has already done those, 'from his youth upward'.
Next, consider Christ's description of the Last Judgement. ". . .in as much as ye did it to least of these, ye did it unto Me. . .in as much as ye did it not to the least of these, ye did it not to Me. . ." Here, those saved and those condemned are separated not by their faith, but by their works.
St. James' point is that there are works which proceed from, and are the signs of living faith--principally following Christ's commandments. Abraham's faith was not an assent to doctrine, a mere belief, but a trust in God which prompted him to lead Isaac out into the wilderness with the intent of offering him as a blood sacrifice because he trusted God's word--again an action, a work, but not a 'work of the law'. So too, those described as receiving a reward in the Last Judgement are not rewarded for keeping the Law of Moses, but for clothing the naked, feeding the hungry, visiting the prisoners, again works, but not 'works of the law'.
By grace are you saved through faith and that not of yourself it is a gift of God, not of works lest any man should boast - for we are HIS workmanship- created unto good works IN CHRIST JESUS
For someone called the Reader, you don't read well. The testimony of Scripture is in faith in Christ, not in works. I would post a gazillion Scriptures, but I don't believe you would read them.
Second, there are two judgments. One for the saved and one for the lost. One is called the Great white throne judgment. One is called the Judgment seat of Christ. At the judgment seat of Christ believers are judged according to their works - not for salvation but for REWARD. GREAT IS YOUR REWARD - or YET AS BY FIRE.
The lost are judged at a different judgment altogether. They are judged based upon what they did with the light they had. All at that judgment will go to Hell. But, for some, the punishment will be less severe than for others (it will be better in that day for Sodom and Gomorrah than for these).
Now, on interpreting James, we are not far apart. My works are evidence my faith is genuine. If I say I have faith in Christ and do nothing for Him, however, chances are,my faith is not genuine. James is speaking of the evidence of faith and how we are justified as Christians before men (and women) of God.
Good works are a necessary component of the Christian life. But they do not make one a Christian. Faith in Jesus Christ ALONE through HIS GRACE ALONE is what saves. NOT OUR WORKS.
Here is how Paul put it... (Pay special attention to verse 5)
Titus 3
1Put them in mind to be subject to principalities and powers, to obey magistrates, to be ready to every good work,
2To speak evil of no man, to be no brawlers, but gentle, shewing all meekness unto all men.
3For we ourselves also were sometimes foolish, disobedient, deceived, serving divers lusts and pleasures, living in malice and envy, hateful, and hating one another.
4But after that the kindness and love of God our Saviour toward man appeared,
5Not by works of righteousness which we have done, but according to his mercy he saved us, by the washing of regeneration, and renewing of the Holy Ghost;
6Which he shed on us abundantly through Jesus Christ our Saviour;
7That being justified by his grace, we should be made heirs according to the hope of eternal life.
8This is a faithful saying, and these things I will that thou affirm constantly, that they which have believed in God might be careful to maintain good works. These things are good and profitable unto men.
9But avoid foolish questions, and genealogies, and contentions, and strivings about the law; for they are unprofitable and vain.
10A man that is an heretick after the first and second admonition reject;
11Knowing that he that is such is subverted, and sinneth, being condemned of himself.
12When I shall send Artemas unto thee, or Tychicus, be diligent to come unto me to Nicopolis: for I have determined there to winter.
13Bring Zenas the lawyer and Apollos on their journey diligently, that nothing be wanting unto them.
14And let our's also learn to maintain good works for necessary uses, that they be not unfruitful.
15All that are with me salute thee. Greet them that love us in the faith. Grace be with you all. Amen.
Work we must! It is part of purpose as Christians. But it does not make us Christians. God's grace through the gift of faith does that.
If one says they have faith but have no works, then that faith is not genuine. It is dead. James said I will SHOW YOU my faith BY MY WORKS. It is evidentiary, not salvific and it is a key reason we were saved that we might do them (Ephesians 2:10) But the works follow after we are saved sealed and sanctified in Christ Jesus.
"Christ does not say, "believe in me" or "have faith", but gives him concrete actions "works" to perform"
"Here, those saved and those condemned are separated not by their faith, but by their works"
You miss read the intent of both of the passages. In the first Jesus gave him something he knew he could not or would not do to prove that what with man was impossible with God was possible; salvation. It was not works that was the subjest but the attitude of the heart.
In the second, it could not have been works that saved because the saved did not know they had done anything that would commend them to God. Their question was "when did we do..." not "look what we did...". Again, it was the attitude of the heart, the fruit of their salvation not the cause of their salvation.