“Hence, whoever knows well this art of distinguishing between Law and Gospel, him place at the head and call him a doctor of Holy Scripture.”  – Martin Luther
Martin Luther was passionate about making this distinction. Before his conversion, confusion on this very issue almost drove him mad. Luther had an acute knowledge of his own sin. Before he understood the proper distinction, passages like Romans 1:17 caused him endless anxiety.
“For in it the righteousness of God is revealed from faith for faith, as it is written, ‘The righteous shall live by faith.'” -Romans 1:17 (ESV)
Without a distinction between the righteousness attained through obedience to the law and the righteousness obtained through Christ’s obedience, anxiety will set in. Will I ever see life? How can a sinner like me ever be righteous enough to attain eternal life? One can easily get confused. Scripture will be misinterpreted, leading to false doctrines. Even the most pious of people will become discouraged.
The Church today suffers from this same malady. One can even be Reformed in their theology, yet possess an interpretation of Scripture that is confused with regard to this distinction. A passage that should be interpreted through the lens of the Law will be read as Gospel, and vice versa.
A perfect example of this dilemma comes through the story of the rich, young ruler. He asks Jesus, “Teacher, what good deed must I do to have eternal life?” (Matthew 19:16) Jesus answers this man by showing him God’s commandments, or the Law. He goes even further, telling the rich ruler to give all his possessions to the poor and follow Him. Does Jesus not understand justification by grace alone through faith in Christ alone? Are the liberal scholars correct when they say that Jesus and Paul taught differing doctrines?
The problem isn’t with Jesus’ answer, but rather with the question being asked. This young man is focused on what he must do. Jesus is pointing out to him that he must be perfect in all his doings to attain eternal life through his deeds. Yet, later in this same passage, Peter asks Jesus a wonderful question, “Who then can be saved?” (v. 25) Jesus explicitly tells his disciples, “With man this is impossible, but with God all things are possible.” (v. 26) So, while Jesus only gave to this rich, young ruler an impossible righteousness that comes through obedience to the Law, He has given to us a righteousness that comes only through faith in Him.
Until that rich, young ruler saw that attaining eternal life through obedience to the Law was a futile, Sisyphean task, he would never appreciate the Gospel of righteousness by faith apart from the law. Jesus perceived that this man had not yet lost hope in his own abilities. He knew this man did not understand the magnitude of his sin. But when people lose all hope in their own righteousness, then (and only then!) are they ready to hear of the hope of the Gospel of grace.
At stake is the heart of the Gospel message itself. Confusion between Law and Gospel leads to moralism… works righteousness… the heresy of the Judaizers. We cannot afford to get this wrong. Eternities will be won or lost by making (or failing to make) this proper distinction. For this reason, this topic will be addressed at the 2014 Southeast Asia Reformed Conference. The hope is to bring clarity to an issue that is often misunderstood, yet is vital to the mission of the Church.
 Luther, Dr. Martin. Sämmtliche Schriften, St. Louis ed. (St. Louis: Concordia Publishing House, N.D.), vol. 9, col. 802.