Any act of biblical interpretation that confuses Law and Gospel, blends them, or makes do with one but not the other, stands in contradiction to the analogy of faith. It's a nice rule of thumb that makes lots of false doctrines easy to spot.In retrospect, I can understand why that brusque statement might not seem to make much sense. So here's what I was talking about.
When the Word of God impacts the conscience of a reader or hearer, it does so in at least one of two ways. The way of the Law is to impose an obligation on you, an obligation to live up to God's religious demands and moral standards. Combined with a sense of your failure to meet this obligation - in a word, sin - the impact of the Law grows into concern, anxiety, guilt, fear, frustration, bitterness, and despair. (Please don't take this as a kind of Kubler-Ross "stages of sin" model.) The way of the Gospel, on the other hand, is to free you from these things by revealing what God has done in Christ, both to satisfy the Law's obligations for you and to pay the penalty for your failure.
This distinction between Law and Gospel - the two faces God's Word presents to our hearts and minds - is not an innovation of the Protestant Reformation. It is a distinction Paul makes explicit in his New Testament writings (see especially Romans 4 and Galatians 3), and Jesus Himself bears witness to it (e.g., Luke 16:16). Properly applied, this distinction can shed light on every book of the Old and New Testaments. But as C.F.W. Walther exhaustively demonstrates in his lectures on this distinction, there are lots of ways to mess it up - so many ways, in fact, that every false doctrine that has ever disturbed the church could be analyzed as a failure to properly distinguish Law and Gospel. For the full scoop, read Walther's book Law and Gospel, which has been published in at least two English translations. I only have space to outline a few of the high points.
First, "Gospel" literally means "good news." But you can't always draw a conclusion about a word's meaning from its linguistic origin. The meaning of "Gospel" is more than the sum of its parts. (The same goes for the Greek word euangelion which we translate as "Gospel.") In a similar manner, the word "Law" in Scripture can sometimes refer to the entire Word of God, the Old Testament, or the Books of Moses, depending on the context; it can even, at times, mean the same as "Gospel." But with regard to the "distinction between Law and Gospel," both words have a narrow, specialized meaning. In this context, "Law" means the commanding and condemning activity of the Word, telling us what to do and accusing us of failure; and "Gospel" specifically means the message that Christ has done all to meet the Law's commands and suffered all that our failure deserves, and that God therefore forgives us.
I emphasize this point so strongly, and beg you to remember it, because few movements have done so much harm to the church's tradition of Bible interpretation as the "Gospel reductionist" movement - which begins its definition of "Gospel" by observing that it literally means "good news," and for all intents and purposes stops there. One result is that every bit of encouragement and positive advice is put on the same level as God's forgiveness (a moralizing tendency). Another result of this broader use of the word "Gospel" (as distinguished from Law) is that moral and doctrinal precepts are reinterpreted as helpful suggestions that are only relevant as long as, and to the degree that, they serve the Gospel. The church that embraces a "reductionist" definition of the Gospel is soon liberated from accountability to biblical teachings (the analogy of faith) and the Law's bracing condemnation of sin. At the end of the process all that remains is a moralistic, sanctification-oriented religion that repeals all of God's injunctions against sinful behavior (since forgiveness makes everything OK!) and jettisons doctrines that people find difficult to believe (since they interfere with the mission of the Gospel). In short, "Gospel reductionism" is a wormhole to apostasy.
Second, anyone who listens to the teachings of any religion can experience, on some level, the impact of the Law. What an open-minded agnostic can deduce about God by observing the nature of His creation will bring him no further than a sense of accountability to One higher than himself. The Gospel can only be heard in a Christian church where the Bible is faithfully interpreted. The Gospel is a message unique to the Bible's written revelation and its proclamation. Nevertheless, Christians always need to hear both Law and Gospel. Why? Because the "old man" (sin) remains in us all our lives, fighting against the "new creature" Christ has raised up in us. We continue to be tempted, and in our weakness we sin daily. The Christian is in constant need of repentance and forgiveness (see Psalm 51; Romans 7; 1 Samuel 2:6).
My middle point: It's amazing how many ways the Law-Gospel distinction can be tampered with. Some teachings blur the line between Law and Gospel, such as the idea that Gospel causes one to tremble in fear. Some turn Gospel into Law, such as interpreting God's gifts of Word and Sacrament as good works we do. Some teachings turn Law into Gospel, such as suggesting if you pray X prayer or support Y ministry you will earn God's favor. Others place obstacles between you and the Gospel (withholding the certainty of salvation), or force you to leap hurtles to get to the Gospel (such as decisions, miracles, charismatic gifts, etc.).
Some teachings soften the impact of the Law (making the prospect of achieving righteousness by works more "doable"); others make it too harsh (burdening people with commands and prohibitions that do not come from Scripture). Some dispose of Law altogether (as if we are completely free to behave as we like), or consider Law the product of an evil god (along with everything material and physical). Some very tempting and practical-sounding teachings find it necessary to dig the spurs of the Law into your ribs after you have heard the Gospel, so when it comes to your sanctification it is not the Gospel but the Law that rides you. Some of these false teachings are subtle, appealing, difficult to spot. But their result is either that the unrepentant feel secure in their sin, or that souls desperate for comfort and assurance find none. Every biblical interpretation that disregards the analogy of faith also fails, in some way or other, to observe the proper distinction between Law and Gospel. And vice versa.
Second-to-lastly, the Law/Gospel distinction as I have defined it is not an assertion about the "intended meaning" of every Bible verse. I am not suggesting one could categorize every sentence of Scripture as either Law or Gospel. Nor am I denying that a single Bible verse can imply both Law and Gospel. While the verse itself has one intended meaning (a principle I mean to clarify in a later installment), it may impact one reader/hearer by the way of the Law and another by the way of the Gospel; or, it may strike the same person one way now and the other way at a later time. For example, the words "Christ died for our sins" (1 Corinthians 15:3) can be a message of reproach (your sins killed Jesus) and a message of comfort (He paid our debt to God).
Lastly, I think Walther is a bit unclear in his instructions to preachers on their responsibility to give their hearers the right balance of Law and Gospel, or to measure out each side of God's Word in proportion to the hearers' need either to be hammered with the Law (to shake them out of false security and self-righteousness) or to be healed with the Gospel. Ever since the first time I read Law and Gospel as a teenager, I was struck by this weakness in Walther's presentation. In effect, he burdens would-be preachers with a hopeless, impossible task. It would have been more helpful if Walther had taken more pains to be clear on this point.
For preaching "Law and Gospel," in due proportion, is not a question of the structure of your sermon or your method of presentation. It is not about whether your sermon outline has two main points or three, or whether you draw a hard line dividing the sermon so that you first speak nothing but wrath and damnation, and then after a clean break you speak nothing but promises and comfort. It is not about whether you dare breathe a single word of exhortation toward the end of the sermon, whether you call that word "the third use of the Law" or a "gospel imperative." It is not about whether you strike a 50/50 balance between the two, either in word count or in intensity, or whether perhaps a 30/70 division might be better.
For no amount of agonizing over your sermon structure or method can overcome the bare facts that the same Word will hit some readers as Law and others as Gospel, and that some in the congregation will especially need to be hammered while others will need to be healed. No amount of care on the preacher's part can ever be sufficient to ensure that every person in the pews gets the right dosage of each. This must be left up to the Holy Spirit. A preacher who faithfully interprets Scripture can content himself with the Lord's promise that the Spirit will instruct those who hear His Word (John 14:26), and will confirm what His ministers proclaim of both condemnation and forgiveness (John 20:22-23).
The distinction between Law and Gospel, therefore, is not a formula for delivering the right amounts of guilt and comfort to each individual. Rather, it is a principle of interpretation that obligates us to apply both "faces" of Scripture to our readers or hearers, as well as ourselves; to recognize and avoid patterns of teaching and application that do violence to this distinction; and, when reading a given Biblical passage, to frankly recognize what it has to say both to rebuke sin and to direct sinners to Christ's forgiveness.