"Vertical" and "Horizontal" Aspects of Righteousness
Michael Bird insists that "vertical" and "horizontal" components to Paul's use of righteousness are equally important, and I think he's right. Justification deals with the vertical problem of a believer's orientation to God and the horizontal problem of Jew-Gentile relationships. "Lutheran" (vertical) and "New Perspective" (horizontal) dimensions to righteousness are inherent to Paul's theology, but the question remains how we should understand them. This is how Michael puts it, quoting himself:
"A holistic reading of Romans and Galatians should tie together the covenantal [horizontal] and forensic [vertical] dimensions of God's righteousness... According to Paul, faith alone in Jesus is the basis of vindication; and faith alone marks out the people of God." (The Saving Righteousness of God, p 153)Michael has the right idea, but "forensic" and "covenantal" are poor ways of understanding the two components, especially the former.
In my blogpost, Paul's Use of "Righteousness", I followed Philip Esler's view that dikaiosyne means privileged or blessed identity -- or acceptability -- based on the Septuagint's intense usage (over 100 times) in Proverbs and Psalms. The bible uses righteousness as a form of ascribed honor ("acceptability") all over the place, and this is clearly the use Paul picked up on. When he was dragged into conflict with the law, he seized the prize of this righteousness from traditional associations with Israelite privilege under Torah, and claimed that Christians not under the law were in fact the ones blessed in God's eyes.
Against the forensic understanding, the Septuagint uses righteousness in a judicial setting only 8 times, and where it means "find in favor of" more than "acquit". Luther's idea that the future judgment occurs proleptically in the present when a person is righteoused by God is alien to Paul's thought, because for the apostle righteousness and the judgment are distinct -- and even more importantly, the righteous (elect) are not even judged anyway. They simply give an account of themselves on the last day, receive their reward, and are waved through. Yes, there is a vertical component to righteousness, but it's not as "Lutheran" as most assume; it's not forensic/judicial.
Against the covenantal understanding, Paul reached a point where he stopped thinking in covenantal categories, certainly by the time of Galatians where law and covenant were obsolete and irrelevant to the Christian believer. The post-I Corinthians Paul wasn't even in bed with a "new" law or covenant, despite echoes of this previous stance in places like Gal 6:2 and II Cor 3:6. "Covenant" may get at the right idea behind the horizontal component to righteousness -- and admittedly does justice to the pre-Galatians Paul -- but we should avoid it when assessing his letters which deal with righteousness head-on.
Let's keep the matter simple like Paul did. The Christian believer was righteous -- or privileged, or blessed, or acceptable -- by virtue of being elect and chosen by God, irrespective of anything he/she may have done to deserve this. Being righteous entailed a specific way of orienting oneself to God, namely, participating in Christ's death apart from the law and living by the spirit (the vertical component). It also entailed a specific way of orienting oneself among Jews and Gentiles in community, again apart from the law (the horizontal component). Righteousness was radically co-opted by Paul so that one's acceptability had nothing to do with the law along either coordinate.
I should stress that there's no reason Paul had to do any of this. He could have easily abandoned righteousness to his opposition and conceded it as a purely Judean phenomenon associated with the law, and rest satisfied in the knowledge that he and his converts were the truly sanctified. Esler points out that Paul did exactly that in I Thessalonians, using sanctification language alone and even going out of his way to delete "righteousness" from his scriptural source (Isa 59:17) in I Thess 5:8. Schweitzer and Wrede were right about righteousness not being central to Paul's thought. And the fact that Paul saw fit to wrest the term from his foes and radically rework it -- reclaim it for his law-free Gentiles -- speaks volumes for his audacious character.