The Letter of James is often described as pseudonymous, meaning that the letter is attributed to James but not actually written by him. In fact, this is an issue for several of the books of the New Testament: The Pastoral Epistles, Ephesians, Colossians, 2 Thessalonians, 1 and 2 Peter, and Jude have all been described as pseudonymous. It is important therefore to think a bit about the practice of pseudonymity in the ancient world, especially as it relates to the authority of the text.
James Dunn wrote the article on Pseudepigraphy in the Dictionary of Later New Testament (IVP, 1997, 977-984). Beginning with the alleged Pauline pseudonymous letters, Dunn creates a methodology for identifying a letter as post-Pauline. Simply put, compare the letter to the others which are undeniably from Paul. In his view, Ephesians and Colossians may or may not be pseudonymous, the pastorals likely represent a “post Pauline tradition.” But as Dunn admits, this method is hard to use on James, Jude, and the letters of Peter. There is no other undisputed work of James, so it is difficult to judge. In fact, he says that the distinction between genuine and pseudonymous with respect to James and 1 Peter is a meaningless argument since in the end we cannot really tell.
On the other hand, a fair argument could be made that James the Just was the author of the letter of James. Conservative scholars (Karen Jobes, Letters to the Church, Terry Wilder, Faithful to the End) consider James’s allusions to the teach of Jesus as well as similarities with the character of James in the book of Acts a evidence the traditional authorship is at least possible (if not likely). These observations track with Dunn’s method (compare the letter to a known source), but at least the comparison to Acts is potentially week since we read the speech of James as reported by Luke, who was not yet a companion of Paul. I do think that Faithful to the End is correct in connecting the James of Acts 15 to the James of the Letter. The character of James in Acts is so consistent with the writer of the Letter of James I have no trouble equating the two.
But the issue of pseudonymity remains. If a letter can be proven to be pseudonymous, does that reduce the authority of that letter in the New Testament canon? Perhaps not.
A writer may choose to attach another name to their work for a variety of reasons, some of which are entirely innocent. For example, it is entirely possible that a writer knew the teaching of James very well and created a letter which accurately reflected the teaching of James, and perhaps this writer even used snippets of James’ teaching. In this case, the Letter of James was not actually penned by James, but is an accurate record of his teaching. There are still some ramifications for inerrancy since the first lines of the book claim to be a letter from James to churches in the Diaspora, but this sort of soft-pseudonymity is not a serious problem. In fact, it is likely that prophets of the Hebrew Bible were assembled in just this way by anonymous editors who accurately recorded the words of their prophet.
On the other hand, a writer may have attached the name of James to the letter in order to give credence to his own ideas, whether they came form James or not. Usually any theory of this sort places the writing of the book well beyond the time of James life, perhaps as late as the second century. This strong-pseudonymity is a much bigger problem for the authority of the text, since the books of the New Testament are assumed to have Apostolic authority. If the letter comes from a much later date and a non-Apostolic author, does it have the same level of authority?
For someone like J. I. Packer, “Pseudonymity and canonicity are mutually exclusive” (Packer, “Fundamentalism” and the Word of God, 184). Conservative scholars appeal to Eusebius, who reported that the church fathers rejected anything that was not known to have come from an apostle or someone from within the apostolic (Eccl. Hist. 6.12.3). I think most conservatives would agree with this assessment and dismiss any argument against the traditional answer that James, the brother of Jesus wrote the letter.
If James was a collection of sayings of the historical James rather than a letter written by him, would that change the authority of the Letter of James for you?