  We present the rest-frame optical luminosity function (LF) of red sequence
galaxies in 16 clusters at 0.4<z<0.8 drawn from the ESO Distant Cluster Survey
(EDisCS). We compare our clusters to an analogous sample from the Sloan Digital
Sky Survey (SDSS) and match the EDisCS clusters to their most likely
descendants. We measure all LFs down to M M* + (2.5 - 3.5). At z<0.8, the
bright end of the LF is consistent with passive evolution but there is a
significant build-up of the faint end of the red sequence towards lower
redshift. There is a weak dependence of the LF on cluster velocity dispersion
for EDisCS but no such dependence for the SDSS clusters. We find tentative
evidence that red sequence galaxies brighter than a threshold magnitude are
already in place, and that this threshold evolves to fainter magnitudes toward
lower redshifts. We compare the EDisCS LFs with the LF of co-eval red sequence
galaxies in the field and find that the bright end of the LFs agree. However,
relative to the number of bright red galaxies, the field has more faint red
galaxies than clusters at 0.6<z<0.8 but fewer at 0.4<z<0.6, implying
differential evolution. We compare the total light in the EDisCS cluster red
sequences to the total red sequence light in our SDSS cluster sample. Clusters
at 0.4<z<0.8 must increase their luminosity on the red sequence (and therefore
stellar mass in red galaxies) by a factor of 1-3 by z=0. The necessary
processes that add mass to the red sequence in clusters predict local clusters
that are over-luminous as compared to those observed in the SDSS. The predicted
cluster luminosities can be reconciled with observed local cluster luminosities
by combining multiple previously known effects.
