The following is a blog post I first posted in September 18th, 2009. I posted this at another blog of mine from back in the day. I think what is really important to understand is that if the student doesn’t understand the entailments of classical Federal or Covenantal theology, they won’t grasp the weight of what we are offering as an alternative and 
counterweight in Evangelical Calvinism. Evangelical Calvinism isn’t actually a counter to five point Calvinism, per se; but instead, it is a counterweight to the thicker theology behind five point Calvinism as that developed in the Post Reformed orthodox theology of the Federal theologians. In order to assuage this lacuna, for some, I offer the following description of a Federal theology from one of its earliest “founders.”
Here is Lyle Bierma on Caspar Olevianus (1536-1587), one of the first developers of Federal Theology (according to Bierma, the first, but this is disputable). Bierma here is describing how Olevianus understood the Covenant of Grace vis-a’-vis the Covenant of Works:
When did God make such a pledge? [Referring to the ‘Covenant of Grace’] We will be looking at this question in some detail in Chapter IV, but it should be mentioned here that for Olevianus this covenant of grace or gospel of forgiveness and life was proclaimed to the Old Testament fathers from the beginning; to Adam after the fall (“The seed of the woman shall crush [Satan’s] head”); to Abraham and his descendents (“In your seed shall all nations of the earth be blessed”); to the remnant of Israel in Jeremiah 31 (“I will put my laws in their minds . . . and will remember their sins no more”); and still to hearers of the Word today. To be sure, this oath or testament was not confirmed until the suffering and death of Christ. Christ was still the only way to Seligkeit, since it was only through His sacrifices that the blessing promised to Abraham could be applied to us and the forgiveness and renewal promised through Jeremiah made possible. Nevertheless, even before ratification it was still a covenant — a declaration of God’s will awaiting its final fulfillment.
In some contexts, however, Olevianus understands the covenant of grace in a broader sense than as God’s unilateral promise of reconciliation ratified in Jesus Christ. He employs some of the same terms as before — Bund, Gnadenbund, foedus, foedus gratiae, and foedus gratuitum — but this time to mean a bilateral commitment between God and believers. The covenant so understood is more than a promise of reconciliation; it is th realization of that promise — reconciliation itself — through a mutual coming to terms. Not only does God bind Himself to us in a pledge that He will be our Father; we also bind ourselves to Him in a pledge of acceptance of His paternal beneficence. Not only does God promise that He will blot out all memory of our sins; we in turn promise that we will walk uprightly before Him. The covenant in this sense includes both God’s promissio and our repromissio.
This semantical shift from a unilateral to a bilateral promise is most clearly seen in two passages in Olevanius’s writings where compares the covenant of grace to a human Bund. In Vester Grundt, as we have seen, he portrays the covenant strictly as a divine pledge. While we were yet sinners, God bound Himself to us with an oath and a promise that through His Son He would repair the broken relationship. It was expected, of course, that we accept the Son (whether promised or already sent) in faith, but Olevianus here does not treat this response as part of the covenant. The emphasis is on what God would do because of what we could not do.
In a similar passage in the Expositio, however, Olevianus not only identifies the covenant with reconciliation itself but describes it as a mutual agreement (mutuus assensus) between the estranged parties. Here God binds Himself not to us “who were yet sinners” but to us “who repent and believe,” to us who in turn are bound to Him in faith and worship. This “covenant of grace or union between God and us” is not established at just one point in history; it is ratified personally with each believer. Christ the Bridegroom enters into “covenant or fellowship” with the Church His Bride by the ministry of the Word and sacraments and through the Holy Spirit seals the promises of reconciliation in the hearts of the faithful. But this is also a covenant into which we enter, a “covenant of faith.” As full partners in the arrangement we become not merely God’s children but His Bundgesnossen, His confoederati.
When he discusses the covenant of grace in this broader sense, i.e., as a bilateral commitment between God and us, Olevianus does not hesitate t use the term conditio [conditional]. We see already in the establishment of the covenant with Abraham that the covenant of grace has not one but two parts: not merely God’s promissio [promise] to be the God of Abraham and his seed, but that promise on the condition (qua conditione) of Abraham’s (and our) repromissio [repromising] to walk before Him and be perfect. Simply put, God’s covenantal blessings are contingent upon our faith and obedience. It is to those who repent, believe, and are baptized that He reconciles Himself and binds Himself in covenant. (Lyle D. Bierma, German Calvinism in the Confessional Age: The Covenant Theology of Caspar Olevianus, 64-68)
I wanted to provide this because there has been recent discussion by some of us on this very issue; what is “Federal Theology?” The charge went, that I misunderstood the premise of Federal Theology, and thus the rest of my critique of it, was amiss. The assertion further went that what I was presenting was akin to the Federal Vision (the red-headed step child of “Federal theologians”).
What this quote demonstrates, beyond a doubt, is that Federal theology is exactly what I originally summarized it to entail. Primary of which, is its conditional nature; and thus its penchant to force people to look to themselves before they look to Christ — an anthropocentric problem.
Further, I fear that even after folks read this, they will say that this just cannot be what contemporary ‘Federal Theologians’ advocate. Well, this is wrong, none other than R. Scott Clark, faculty member at Westminster Theological Seminary–California (bastion of contemporary Federal Theology), clearly defends and advocates for this kind of “bilateralism” that we see in the ‘Federal Theology’ of Olevianus. Here is a piece Clark has on this at his blog.
I realize much of this requires further commentary, but I’m just going to put this out there for future reference. I want folks to know that I’m not engaging a ‘paper-cut’ theology when I critique Federal Theology vis-a’-vis Evangelical Calvinism.