On The Question of the Law’s “Third Function”:
The Formula of Concord approaches the issue from Melanchton’s perspective, but phrases its answer with much more precision then he. One might summarize its position as follows: the question of the need for an informatory function in the (unattainable) ideal case of a perfect saint is answered in the negative, but in view of the actual situation of the regenerate the answer is affirmative. However, the possibility of the law’s being purely informatory is categorically denied.
Notice how the Formula treats the ideal case. “If believers and the elect children of God were perfectly renewed in this life through the indwelling Spirit in such a way that in their nature and all its powers they would be totally free from sins, they would require no law, no driver. Of themselves and altogether spontaneously, without any instruction, admonition, exhortation, or driving by the law they would do what they are obligated to do according to the will of God.” This never occurs, however, for in this life the faithful are not completely renewed. The old Adam still infects their nature and all its internal and external powers and consequently they invariably also need the law. For what purpose? Surely not in order to empower and induce them to fulfill it, since that power comes only from the Holy Spirit. Nor do they need it as mere information. Instead the Holy Spirit “employs the law to instruct the regenerate out of it and to show and indicate to them in the Ten Commandments what the acceptable will of God is. . . . He also admonishes them to do these, and when because of the flesh they are lazy, negligent, and recalcitrant, the Holy Spirit reproves them through the law. . . . [For] to reprove is the real function of the Law.” Not for a moment does the Formula of Concord forget the fundamental Pauline-Lutheran understanding of the law already apparent in the text of the decalogue; namely, that it is always a law of retribution and that even when instructing the regenerate it cannot cease to be just that.
We have here admittedly a double usage of the term “regenerate.” On the one hand, it designates that person who “is born anew by the Spirit of God and is liberated from the law,” whose life is, to be sure, “comprehended in the law,” but who is “no longer under law but under grace.” In this man “there is now no condemnation”–the Formula of Concord knows this too. On the other hand, it applies this term to the man who despite his regeneration still lives in internal conflict, “for the Old Adam, like an unmanageable and recalcitrant donkey, is still part” of him. This is man in his factual earthly existence, who still, even when pardoned, remains a pardoned sinner. The regenerate man in the first meaning of the term stands in indissoluble personal union with the old Adam. In terms of personhood, they are identical. They represent not two parts but two facets of one and the same personality. This duality is not to be viewed as though in essence man were partly a sinner and partly not a sinner, for in terms of empirical data no such thing as a sinless regenerate person exists. Rather, this duality is grounded in the fact that the regenerate man stands under God’s scrutiny, who condemns him according to the law but pardons him according to the gospel. If I look at myself, said Luther, then all is flesh, i.e., all is sin. “If I look at Christ, I am completely holy and pure, and I know nothing at all about the Law.”
According to this view of Luther’s, which corresponds exactly with the Pauline perspective, the moment never arrives in the life of the Christian when the law has nothing more than an informatory significance for him. When we look to Christ, the law has absolutely no validity. On the other hand, when we look to ourselves, it is indeed valid, yet not in the sense that we only need to ask it what we ought to do, but rather that it constantly pronounces also upon Christians the verdict of God which makes sinners out of us. But this then also represents the constant anguish [Anfechtung] of our conscience, the temptation either to securitas or to desperatio, which we must relentlessly counteract by faith in the gracious promise of the gospel. Even for the Christian, the law is always and only Anfechtung. To this extent the irreconcilable opposition of law and gospel remains also for the Christian.
If the notion of a “third use of the law” is understood in purely informatory terms, then we shall have to agree with the Scandinavian and Finnish theologians who have pronounced the doctrine of a third use incompatible with the Lutheran understanding of law and gospel. If we still wish to continue to use the concept in theology, it must be applied as it is in the Formula of Concord only for answering the question of the realm of the law’s validity, but not for indicating a special function of the law. The third use of the law then designates its significance for the regenerate in his earthly empirical existence, but not in some imagined earthly perfection which does not exist. In the earthly empirical life of the regenerate the law constantly exercises also the usus theologicus. It steadfastly convicts him of his sin.
-Werner Elert. Law and Gospel