From the confessional Reformed perspective, the Law-Gospel distinction is not a paradigm we impose onto the Scriptures, but something we find within redemptive history, namely through covenant. Every person who has ever lived has either been condemned by the representation of Adam or justified by the representation of Jesus Christ (Romans 5:18). When we think about representation, we think about our federal government, where we elect people to represent us. If they make good decisions, we prosper; if they make bad decisions, we suffer. Representation is the essence of covenant theology since the Latin word covenant literally is foedus. Therefore, it is proper for us to explore the nature of Adam’s covenant and Christ’s covenant.

Law-Gospel Distinction as the Structure of the Bible

In the beginning, God made the “Covenant of Works” with Adam. A covenant is a divinely sanctioned commitment which is designed to bring man beyond what was capable of him by nature. Adam was incapable by nature as a man to obey and somehow force the Almighty God into a debt to reward him. However, in the Covenant of Works, God condescends to Adam to promise him and his offspring an eternal, glorified life with Himself upon the basis of perfect obedience and threatens eternal death and separation from the blessing of God (Genesis 2:16-17). This covenant is based upon works (i.e. the Law). This is not “legalism” because God created Adam with the ability to fulfill this covenant. However, Adam did not fulfill his covenantal commitment and the sanctions fell upon Him and the whole world. (Romans 5:12). Adam’s sin was imputed to the whole world as if we have eaten from the tree of the knowledge of good and evil. We therefore fall short along with Adam in attaining glorified life with God (Romans 3:23).

However there is light, for in the darkness of the broken Covenant of Works, comes the dawn of the Covenant of Grace. After Adam and Eve sin, even before God pronounces a single word of judgement to them, He announces the Gospel in seed form for the first time. He pronounces judgement upon the serpent that contains promise for sinful mankind,

I will put enmity between you and the woman, and between your offspring and her offspring; he shall bruise your head and you shall bruise his heel. – Genesis 3:15

What makes this promise the first revelation of the Covenant of Grace? Whereas God said to us in the Covenant of Works “You will” (Genesis 2:17), God says to us in the Covenant of Grace “I will.” The Covenant of Works is about what we must do for God to fulfill our commitment to Him, while the Covenant of Grace is about what God will do for us to fulfill His commitment to us, which He purposed before the creation of the world (2 Timothy 1:9, Titus 1:2). In other words, this covenant is based upon the grace of God, not our own works. This involves God sending a new Adam in the line of Eve to rescue us from Adam’s sin and do what the first Adam could not. This new Adam we know as our Lord Jesus Christ who has imputed His righteousness to us and has given us eternal life as a free gift (Romans 5:17), not because of what we have done or who we are.

The apostle Paul even sees a parallel between the Covenant of Works and Mosaic Covenant in the clearest affirmation of the Law-Gospel distinction in the New Testament:

For all who rely on works of the law are under a curse; for it is written, “Cursed be everyone who does not abide by all things written in the Book of the Law, and do them.” Now it is evident that no one is justified before God by the law, for “The righteous shall live by faith.” But the law is not of faith, rather “The one who does them shall live by them.” Christ redeemed us from the curse of the law by becoming a curse for us—for it is written, “Cursed is everyone who is hanged on a tree”— so that in Christ Jesus the blessing of Abraham might come to the Gentiles, so that we might receive the promised Spirit through faith. – Galatians 3:10-14

There are multiple ways the Mosaic Covenant echoes the Covenant of Works. In verse 10, Paul quotes Deuteronomy 27:26 to show that the Mosaic Covenant threatens a curse for disobedience to the terms of the covenant. This curse involves being exiled from the land of Israel, where God’s presence resided in the temple in Jerusalem (Deuteronomy 28:63-64). This echoes Eden because Adam and Eve were exiled from the presence of God in the garden (the prototypical temple) for their disobedience (Genesis 3:24). Here also we see that the primary function of the Law after Adam is to reveal our sin and that it is foolish to attempt to be justified by works (Romans 3:20). In verses 11-12, we see Paul distinguishing the two ways of righteousness and life: through works or through faith in the grace of God. Paul even says the law is not of faith.

The Law and the Gospel are of two different substances, works and grace respectively. In the Mosaic Covenant, the land of Israel was to be blessed with temporal life, safety from enemies, and glorification among the nations upon the basis of the Israelites’ obedience to God’s Law, which was to love God with all their heart, soul, mind, and strength, and their neighbors as themselves (Leviticus 18:5, Deuteronomy 28:1-7). This was to make Israel look forward to a New Jerusalem, eternal life, safety from Satan and fallen angels, and glory with the nations in the new heaven and new earth which their fathers looked forward to (Hebrews 11:13-16, Revelation 21:1-4). This glorified life with God would not be gained by works but by faith in the true Israel of God, Christ Jesus (Matthew 2:15, Romans 10:6-8, Deuteronomy 30:11-16) who redeems us from the Law’s curse by taking the curse for us and giving us the blessing of eternal life.

Law as a Covenant vs. Law as a Rule of Life

Hence, we see why Martin Luther had an aversion to those who think Christ’s grace made it possible to be justified in part by works as He writes,

But advocates of the Pope and sectarian spirits don’t hold this doctrine. They turn everything inside out. From Christ, they make a Moses, and from Moses, a Christ… The adversaries are so diabolical and perverse that they merge together law and grace. Thus, they create this monstrous monstrosity by transforming Christ into Moses!

What’s wrong with making Christ a new Moses? Ultimately, the problem is the confusion between the Law as a covenant and the Law as a rule of life. Remember our definition of a covenant. A covenant is designed to extend man’s blessings beyond what he was naturally capable of obtaining on his own. The law of God is written on our hearts by nature (Romans 2:14-15). The Law of God is present no matter if there are any covenants, or which covenant we are under, for we are creatures of God, who is our Creator in whom we have the obligation to obey. However, we could not obey God enough to earn eternal life because we are creatures who cannot put God under a debt that He must repay us (Job 41:11). So God made the Covenant of Works with Adam to bring him to eternal life. Adam failed, but Christ succeeded as our representative so we are no longer under the Covenant of Works. However, the Law still remains.
In Romans, Paul talks about how the Law could never justify a sinner (3:20) and that “Christ is the end of the law” (10:4) Yet Paul still commands us to obey the Law, to love God and our neighbors (13:10). The difference is that we don’t obey the Law to get eternal life, but rather obey from an overflow of gladness in receiving eternal life in Christ. As Paul says, we have freedom from the bondage of the Law’s demands and threats (Galatians 5:1). Our obedience can no longer justify us and our disobedience can no longer condemn us. Yet we use that freedom not to sin, but to serve the Lord “without fear, in holiness and righteousness before him in all our days” (Luke 1:74-75). We don’t obey the Law because we are afraid of God as our judge who punishes disobedience, but because God is our Father through the Lord Jesus who loves us and cares for us (Galatians 4:4-5) by grace alone apart from our love for Him or for our neighbors. Now God our Father instructs His children with His Law as a rule of life.

Summarizing the Law-Gospel Distinction

In short, the Law says, “Do!” The Gospel says, “Done!”. The Law requires perfect obedience for eternal life. The Gospel gives you the perfect obedience of Christ and eternal life as a free gift. The Law announces a curse on all who disobey. The Gospel announces the redemption from the curse on all who believe. The Law shows us that we are ungodly. The Gospel shows us that Christ died for the ungodly. The Law requires you to love God and give yourself for Him. The Gospel tells you that God loves you and has given Himself for you. The Law says, “Do this and live.” The Gospel says, “Do this because you live.” The Law says, “Obey or God will cast you away forever.” The Gospel says, “Obey, because God is your Father for the sake of Christ who will hold you forever.”

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