How Christians perceive the Mosaic covenant is a watershed issue for Biblical interpretation; answer the question one way, your theology and ministry follow, answer another, and likewise, your theology and ministry follow. It is, therefore, sharply disputed.
Reformed theologians typically see all the covenants after mankind fell as a “covenant of grace” (Adam, Noahic, Abraham, Mosaic, Davidic), in contrast to the pre-fall relationship which God had with Adam, which was a “covenant of works.” A covenant of works means that man can fulfill the conditions of the covenant in order to receive the blessings, whereas a covenant of grace means that he cannot. Reformed theologians argue that after the Fall, God only made covenants of grace with mankind. This is to say that mankind cannot fulfill the conditions of the covenant necessary in order to receive the blessings of the covenant and that God fulfills their conditions for them out of grace.1 Thus the blessings of these covenants can only be received by faith.
Baptistic theologians generally2 agree that all these covenants are covenants of grace—except the Mosaic covenant (i.e., “old” covenant). They argue that the Mosaic covenant is a covenant of works, that is, that one must fulfill the conditions of the covenant in order to receive the blessings of the covenant. In the baptistic perspective, the “new covenant” that Christ made is continuous with the Adamic, Noahic, Abrahamic, and Davidic covenants—but not the Mosaic, which would be a covenant of works.
Who is right? Is the Mosaic covenant a covenant of works or grace?
To be clear: Both the Reformed and Baptistic approaches say there are conditions which must be fulfilled in the Mosaic covenant to receive its consequent blessings. Likewise, both agree that the Mosaic covenant has grace. After all, for mankind to be in covenant with God at all is a gift of grace! The question is this, in the Mosaic covenant, does God fulfill the obligations himself so mankind can receive the blessings, or are the blessings of the old covenant completely contingent on man’s obedience?
Ten reasons follow that convince me of the Reformed interpretation:
1. “(It is) not because of your righteousness or the uprightness of your heart” that God gives Israel the land (Deut 9:5). Similarly, Ezekiel warns people, even those who are basically law-abiding Jews, to not trust in their own righteousness for the blessings of the covenant (Ezek 33:12–16). God gives the blessings of the covenant out of grace, not works.
2. Christ himself takes on the curse of the Mosaic law (Gal 3:13–14). By doing this, he is fulfilling the covenantal expectation that covenant breakers would be cursed by God.
3. After Israel is given the covenant (Ex 20), they build a golden calf breaking the covenant (Ex 32), yet God gives them grace because “I will be gracious to whom I will be gracious and I will show mercy on whom I will show mercy” (Ex 33:19). This is remarkably similar to Abraham still receiving the covenant after violating it (Gen 12; 15:6).
4. Built into the Mosaic covenant is an elaborate system of atonement so that Israel may experience forgiveness before the Lord (Lev 1–9). It is unclear why God would teach them to expect grace if it was meant to be a covenant of works.
5. Believers in the old covenant were able to receive many blessings of the new covenant “on credit” of what Christ would accomplish in the future (Heb 9:15). They are part of the commonwealth of Israel, have received the covenants of promise, and united to Christ (cf. Eph 3:12). This includes justification (Gen 15:6), regeneration (Deut 10:16; Ezek 18:30–32), and the indwelling of the Spirit (Neh 9:20; Hagg 2:4–5). This is probably not because they all understood all the intricacies of the new covenant, but because they were able to believe in the gospel through the old, Mosaic covenant. It is unlikely that this could have been true if the old covenant was a covenant of works and fundamentally discontinuous with the new covenant.
6. Psalm 105 treats the covenant made with Moses and with Abraham as fundamentally continuous, calling the latter an “everlasting covenant” (Ps 105:10), then going on to describe God's dealings with Israel in the wilderness (Ps 105:23–45). This is similar to Psalm 111 which both says that God “remembers his covenant forever” and has “commanded his covenant forever” (Ps 111:5, 9). Mary herself recounts these promises that God will keep the Mosaic covenant (Luke 1:72). It seems unusual that the Mosaic covenant would both continue on the Abrahamic Covenant and be “everlasting” if it were not a covenant of grace.3
7. In the “institution passages” of the Lord’s Supper (Matt 26:28; Mark 14:24; Luke 22:20; 1 Cor 11:25) all refer to the establishment of the new covenant. The Lord’s Supper is a sign and seal of the new covenant. In particular, it carries on the theme of the Passover in the old covenant (Matt 26:17–19; Mark 14:12–16; Luke 22:11–15). It would seem unusual that the Lord’s Supper would take over the Passover feast if fundamentally the Mosaic and new covenants were discontinuous covenants.
8. The NT treats all the OT covenants as continuous. For example, in Ephesians 3:12, Paul tells the Ephesians that before they were in Christ, they “were separated from Christ, alienated from the commonwealth of Israel, and strangers to the covenants of promise.” Which covenants in the OT are covenants of promise? And which one establishes the commonwealth of Israel? And which one brings one into contact with Christ? The answer is impossible to parse, because the OT treats them as a fundamental unity. Again, this would make no sense if the Mosaic covenant is a covenant of works while others are the covenant of grace.
9. We are told that Christ interacted with his people through previous covenants. God gave circumcision as a sign and seal of the righteousness that comes through faith in Christ (Rom 4:1–12, esp. vs. 11–12). Christ led his people in Exodus (1 Cor 10:1–5). Jesus saved a people out of the land of Egypt (Jude 5). This is unlikely if the Mosaic covenant is not a covenant of grace.
10. Occasionally, the exile is used to show that the Mosaic covenant is a covenant of works. After all, God had promised to exile Israel for covenant breaking (Deut 29:16–29). When God finally sends his people out of the land, he curses them for covenant breaking (cf. 2 Kings 24). The condition for returning to the land, however, is heartfelt repentance (Deut 30:1–10). When the people do return to the land, however, their hearts appear to be no different than when they left (Neh 13; Mal 1–4). If the Mosaic covenant was a covenant of works, God would not have brought them back until they were fully repentant. But, because it is a covenant of grace, God does not wait until they can muster up perfect obedience, but instead brings them back in his mercy.
The Mosaic covenant is a covenant of grace. God gives the Israelites the blessings of that covenant in spite of their disobedience. It is a covenant of grace, and in this way it is continuous with the new covenant. Just as in the new covenant, God offered the benefits of his Mosaic covenant by grace through faith. The only way to receive the blessings of that covenant with him was faith (Jude 5; Rom 4:1–12; Heb 4:2).
“The covenant of grace is, however, not the discarding or annihilating but rather the fulfilling of the covenant of works. The difference between the two is mainly that in our stead Christ fulfills the requirements which God by reason of the covenant of works can bring to bear on us. Hence it is that the covenant of grace, although in itself it is pure grace, can from the very beginning put the law of the covenant of works into its service, unite itself with that law, and by the Spirit of Christ bring to fulfillment in the believers.” Herman Bavinck, The Wonderful Works of God, Introduction in the Christian Religion according to the Reformed Confession, Trans. Henry Zylstra (Philadelphia: Westminster Seminary Press, 2019), 391. I have lightly modified this quotation to change the punctuation marks in two places—removing one comma and adding another—to bring it into conformity with modern conventions. The translation was done in 1956, and thus the punctuating conventions have slightly changed.
There is diversity in this. The earliest Baptistic theologians tended to view the Abrahamic covenant as a covenant of works. Likewise, some modern Baptists concur with the Reformed view of a unified covenant of grace throughout the Bible.
This is one of the reasons why 1689 Baptists generally interpret the Abrahamic covenant as a covenant of works. I find this unpersuasive.