Historic reformed theology splits the history of God’s dealing with man into two divisions: works and grace. The first division is the era in which man could stand or fall before God based on his own obedience (Covenant of Works). This period ended when Adam fell and was expelled from the garden of Eden. From the time of Adam’s fall until the return of Christ, God began dealing with man as either fallen in Adam or standing in Christ. In other words, there are two representatives for all men: Adam and Christ. The time from Adam’s fall to the return of Christ is a period of grace, because for any man to be restored in his relationship to God, he must receive God’s grace.
Debates amongst Bible students arise when we consider the role of grace and works and the covenant made with the people of Israel at Mount Sinai. Clearly, the people had been graciously chosen by God, and not for any good work they had done, and they had been miraculously delivered and made a people. But, this people were given laws to follow in order to remain in fellowship with God and to retain his blessing. There are several traditional views within Protestantism to try to explain the Sinai Covenant.
Old School Dispensationalists believed that the covenant at Sinai was for the people of Israel a
covenant of works conditional covenant respecting their salvation. God offered the Hebrew people his grace through the Abrahamic Covenant, which they subsequently rejected, and so God made a works-based arrangement with them. Some also believed that Jews would receive salvation by obedience to the law and observance of the ordinances.
The Dispensation of Promise ended when Israel rashly accepted the law Exodus 19:8. Grace had prepared a deliverer (Moses), provided a sacrifice for the guilty, and by divine power brought them out of bondage Exodus 19:4 but at Sinai they exchanged grace for law. (Scofield Reference Bible, Notes on Genesis 12:1)
The Christian is not under the conditional Mosaic Covenant of works, the law, but under the unconditional New Covenant of grace. (Scofield Reference Bible, Notes on Exodus 19:25)
As a dispensation, grace begins with the death and resurrection of Christ (Romans 3:34-26, Romans 4:24-25). The point of testing is no longer legal obedience as the condition of salvation, but acceptance or rejection of Christ, with good works as a fruit of salvation
Administration of the Covenant of Grace
Many reformed theologians, in placing emphasis on the continuity of God’s Plan of Salvation between the Old and New Testaments, have considered the Old Covenant, not as a separate and distinct substance from the New Covenant, but rather as only a different administration (or dispensation) of this same gracious covenant. The Mosaic Covenant then, is wholly a gracious covenant. The people are given laws, not for the salvation of their souls, but rather to organize life in the promised land and to foreshadow the coming Messiah. This is Sam Waldron’s view and that of many popular reformed baptist pastors.
Of a Different Substance from the New Covenant
Many Baptist covenant theologians have viewed the Mosaic as being of a wholly different substance and administration from the Old. They emphasize the legal nature of the Old Covenant, but unlike dispensationalists, do not believe the legal nature was in regards to salvation, but rather was a purely carnal covenant which offered blessing/curse to the people of Israel as a condition for remaining in the land of promise. This is AW Pink’s view and the view of Pascal Denault and the 1689 Federalism blog.
Some Baptists have a sort of hybrid view of the Old Covenant in which the Covenant is seen as being a republication of the law of man’s creation (see Marrow of Modern Divinity). In other words, God has re-published the original Covenant of Works, made with man in the garden of Eden. These Baptists, like dispensationalists, believe the covenant offered life and salvation by the perfect keeping of the law of God. Unlike dispensationalists, however, they believe that no man was able to keep the law of God perfectly to the saving of his soul – with one notable exception! Our Lord Jesus Christ was born under that covenant and kept the law perfectly! So, for Jesus Christ, the Mosaic Covenant was an administration of the Covenant of Works. For the nation of Israel, the covenant was a national covenant that offered blessing in the land through obedience (but not salvation) and offered a sacramental system to ceremonially atone for the sins of the nation and to foreshadow and prepare the way for Christ. For individual people who lived in the covenant, God dealt with them through his gracious plan of salvation whereby their sins could only be righteous by the sacrificial death and meritorious work of Christ. This is the view of Jeff Johnson and is similar to recent views held by some Paedobaptists.
This is a thorny issue and each view point has much scriptural support and great theologians speaking for it. Although a difficult and tough knot to untie, I think that studying grace/works/continuity/discontinuity between the Old and New Covenants is the key for understanding the scriptures!
…[God] was pleased to make known His eternal purpose of mercy unto the fathers, in the form of covenants, which were of different characters and revealed at various times. …Each one reveals some new and fundamental aspect of truth, and in considering them in their Scriptural order we may clearly perceive the progress of revelation which they respectively indicated. They set forth the great design of God accomplished by the redeemer of His people. (AW Pink)
The post linked below contains a very helpful discussion of these manners and a very lively and edifying series of comments by several great Baptist men who hold to traditional Particular Baptist views. The brotherly tone and challenging back and forth is very edifying example of charitable theological discussion and many key issues are clearly discussed.