Enter Law and Gospel. This is a method pioneered by Martin Luther, and systematized by later Lutheran theologians, most notably C. F. W. Walther. In a book of lectures by Walther, he sets forth the basic tenants of his method in several theses, the first of which are:
1: The doctrinal contents of the entire Holy Scriptures, both the Old and the New Testament, are made up of two doctrines differing fundamentally from each other, viz., the Law and the Gospel.2: Only he is an orthodox teacher who not only presents all the articles of faith in accordance with Scripture, but also rightly distinguishes from each other the Law and the Gospel.3: Rightly distinguishing the Law and the Gospel is the most difficult and highest art of Christians in general and of theologians in particular. It is taught only by the Holy Spirit in the school of experience.4: The true knowledge of the distinction between the Law and the Gospel is not only a glorious light, affording the correct understanding of the entire Holy Scriptures, but without this knowledge Scripture is and remains a sealed book.
So all of scripture is Law or Gospel. The question then becomes, what is the law, and what is the gospel? For the purposes of this hermeneutic, some brief categorical descriptions would include:
Law: What God demands from us, Gospel: What God gives to us. Law: Our duty towards God and our neighbor, Gospel: Jesus Christ crucified for sinners.
That last one is crucial: "Gospel" is quickly becoming a junk drawer word due to "innovators" trying to bring a fresh perspective to a competitive free market religious culture. But at its core, the good new is that Jesus died for you, because you were a sinner.
How is this used in interpreting scripture?
Well, the best way to learn this is to read "Law and Gospel" by Walther, and allow him to give you point by point examples of how to rightly distinguish the two. The point is this: Without Christ crucified, there is no good news. If the death of Christ isn't given the last word, than all the sermon leaves you with is an obligation. This becomes problematic because even as disciples of Jesus we continue to sin (except John Wesley, of course!). Most evangelical sermons deliver what I like to call a "gospel sandwich." They preach the law to show you that you are a sinner, the preach the forgiveness purchased by Christ, but then once you have been offered freedom, they finish with a spiritual or practical to-do list. No matter how simple they try to make it, at least one of two rules will always apply: 1. It is impossible. At some point, you will fail to do what the preacher demands. 2: It is not enough. Could you succeed perfectly in following the suggestions of the preacher, you would still not have come anywhere close to removing sin in your life. Only Jesus can, by dying for you and nailing your sins to the cross. So leave it at that, and don't pile on guilt trips to repentant sinners, given them heavy burdens and calling it "sanctification" or "discipleship."
For a more specific example, look at the Ten Commandments. This passage of scripture, like all passages, contains simultaneously, in the same words, both the Law of God and the Gospel. How is this passage Law? It defines and summarizes our duties and obligations to God and neighbor. It gives us a brief exposition on what it means to love God with all your heart and soul and strength and love your neighbor as yourself. Therefore, this passage teaches us that you are NOT loving your neighbor IF your are stealing from him. This, by the way, was actually gracious of God to let us know. A little "gospel preview" there. However, every one of us is, at some point, a thief. "But I've never stolen!" you tell yourself. Ah, but look at the New Testament: "Anyone, therefore, who knows the good he ought to do, and doesn't do it, sins." Ok… so even if you haven't taken something that belongs to your neighbor, if a neighbor has ever been in need and you have failed to supply him when you were able to, then you have taken from him what you were morally obligated to give. Or, using the "love your neighbor as yourself" line, you have failed to help him in the manner that you would have needed were you in his shoes. Unlawful withholding is stealing in the same way that unlawful taking is.
Therefore, far from serving as a practical tip for living in peace and harmony, the commandment truly reveals how we are, in and of ourselves, utterly incapable of it.
How on earth could this possibly be good news?
First of all, look at the sequence of the commandments. The first thing God says is, "I am the Lord YOUR God, who brought you out of the land of Egypt…" etc…
He doesn't say, do things and I will be your God, he says He IS your God period. God's acceptance of His people is not dependent on their ability to live righteously. What is it dependent on then? It is dependent on the ability of somebody else to live righteously, and that person is Jesus.
So the second way that this is good news is that it begins to paint a picture of Jesus for us. Jesus never stole from anybody, and he always gave to those in need as he was able, no matter what and with no exceptions. So what if Jesus is a nice guy? Well, first of all, if Jesus was a sinner, his death couldn't possibly save you. Secondly, knowing what Jesus is like is crucial because he is the visible image of the invisible God. Therefore he paints for us a picture of who God is. And the nature and character of God is the foundation of the gospel from the beginning: If Jesus loves all and does good to all, that means God does. And if the almighty, omnipotent, all powerful creator of the universe has this kind of benevolence and good will towards his creatures, this gives us hope no matter how screwed up and sinful we are.
Thirdly, this law does, through Jesus, give to us what it without Jesus demands from us. Without Jesus, the law demands we not sin and convicts us when we do. But with Jesus, whose sinless life is credited to us as a free gift, this law becomes promise that God fulfills in, with, and through us. (In, with, and through… remember that for later points on the "Why I became a Lutheran" series…) The commandment to not steal is fulfilled IN us when Christ, through the Holy Spirit, comes to live in us and fill us with His righteousness. It is fulfilled with us as, when tempted to steal, Christ is there with us fighting the battle of temptation for us. And the command is fulfilled through us as, through the power of the Holy Spirit and faith in Christ, we not only refrain from stealing, but become unexplainably generous and giving as Christ works to make us more like Himself: Eagerly desiring to give mercy to all.
When scripture is seen through this lens, everything becomes good news. Every demand God makes on us is seen through the completed work of Christ on the cross. But instead of nullifying the commandment and using the work of Christ to make the law unnecessary, what we end up with is incentive to obey the law, comfort for our many and obvious failing to obey the law, and strength and power to grow in grace as we are continually transformed more and more into a person that is like Christ and behaves like Christ more naturally.
The law and the gospel, by this method are both proclaimed in their fullness. The big challenge is to rightly distinguish the two. Calling one the other leads to the bondage of either legalism or license.
This is a way of understanding the Bible that challenges without demanding, directs without condemning, and glorifies what God has done for us instead of what we are doing for God.