The Gospel of “Costly Grace”: Bonhoeffer, Shepherd, and Jack Miller

As I read Dietrich Bonhoeffer’s The Cost of Discipleship, I am struck by his powerful critique of “cheap grace” and his call to embrace “costly grace.”

Bonhoeffer’s warning against grace without transformation addresses a persistent danger in every generation. Yet, his reflections also raise deep theological and pastoral questions: How does grace transform? How are justification and discipleship related? How do we avoid distorting grace into either nominalism or legalism?

These same questions surfaced in the Westminster Seminary controversy surrounding Norman Shepherd and in Jack Miller’s responses to Shepherd’s theological innovations. Both Shepherd and Miller sought to address the challenges of nominalism and discipleship in the church, but they offered profoundly different solutions.

At the heart of these debates—and in Bonhoeffer’s writings—is the question of how we proclaim and protect the gospel’s transforming power, particularly as it relates to justification, the Holy Spirit, and spiritual vitality.

In what follows, I aim to explore the theological intersections of Bonhoeffer, Shepherd, and Miller, and provide a rich and pastoral reflection on their differences. My hope is to encourage a deeper understanding of the gospel and its implications for our lives and ministry today.

Bonhoeffer’s Costly Grace and the Challenge of Nominalism

Bonhoeffer wrote The Cost of Discipleship in 1937, in the shadow of the Nazi regime and the German church’s capitulation to Hitler. In this context of compromise, Bonhoeffer decried “cheap grace” as forgiveness without repentance, discipleship, or transformation. “Cheap grace,” he wrote, is “grace without the cross, grace without Jesus Christ.” By contrast, “costly grace” calls believers to take up their cross and follow Jesus because it is grounded in the infinite cost of Christ’s sacrifice.

Bonhoeffer’s assertion that “only those who believe can obey, and only those who obey can believe” highlights the inseparable relationship between faith and obedience. Faith is not a mere intellectual assent to doctrine; it is a trust that manifests in action.

However, some Reformed critics have noted that Bonhoeffer’s Lutheran context left room for ambiguity about whether obedience is a fruit of justification or a condition for it. While his primary aim was to confront nominalism, his language risks suggesting that obedience is required to sustain justification, rather than its inevitable result.

Bonhoeffer’s concern for nominalism remains profoundly relevant today. Many in the church, as Bonhoeffer observed, are baptized non-Christians—people who claim faith but have not surrendered their lives to Christ.

Yet, as we will see, the solution to this problem is not found in adding conditions to grace but in proclaiming the gospel so powerfully that it awakens hearts to the beauty of discipleship.

Shepherd’s Covenant Theology and the Westminster Controversy

Decades after Bonhoeffer, Norman Shepherd confronted similar concerns about nominalism within Reformed circles. Shepherd believed that contemporary presentations of justification by faith alone lacked a robust connection to covenantal obedience. He feared that a purely declarative understanding of justification could lead to an unbiblical separation between faith and discipleship, fostering a static “easy-believism” view of salvation.

Shepherd developed a three-stage framework for justification:

1. Initial Justification: By faith alone, at the moment of conversion.

2. Continuing Justification: Maintained through covenantal obedience.

3. Final Justification: Based on faith and non-meritorious works at the last judgment.

Shepherd’s framework sought to emphasize the necessity of obedience while retaining the Reformed principle that salvation is by grace.

However, Shepherd’s proposal faced serious critiques from colleagues and the broader Reformed community. Critics argued that Shepherd’s approach conflated justification and sanctification, threatening assurance by making obedience a condition for maintaining one’s justified state. His framework also appeared to undermine the sufficiency of Christ’s work by introducing human obedience as a factor in final justification.

While Shepherd’s concerns were academic and pastoral—rooted in a desire to address nominalism and promote discipleship—the theological tensions in his approach led to a sharp division at Westminster Seminary and in the Reformed church, ultimately resulting in his departure.

Jack Miller’s Gospel-Centered Response

Jack Miller, Shepherd’s colleague at Westminster, engaged these debates with both theological precision and pastoral compassion. Miller deeply respected Shepherd’s sincerity and shared his concerns about nominalism. But he fundamentally disagreed with Shepherd’s theological framework, offering instead a vision of the gospel that emphasized the transforming power of justification by faith alone and the central role of the Holy Spirit in the believer’s life.

1. Galatians and the Ministry of the Spirit

Miller’s understanding of justification and transformation was rooted in his study of Galatians. He observed, “Many people think Galatians is concerned first of all with justification by faith since it’s so prominent. Galatians is not first of all concerned about justification by faith, but about the ministry of the Holy Spirit.” For Miller, justification is the foundation that safeguards the “spiritual freedom and spiritual power” of the believer. He added, “The way you get the power is always staying on that foundation [of justification by faith].”

Miller saw justification not as the beginning of a series of steps, but as the continuous foundation of the Christian life. To move away from justification, he warned, is to lose the vitality of the Spirit’s work and the freedom that enables discipleship.

2. The Transforming Power of Grace

Miller emphasized that the gospel itself is the power that produces obedience. Justification by faith alone is not a passive declaration but a relational reality that transforms the believer through union with Christ. By rooting their identity in their adoption as children of God, believers are freed from both legalism and complacency. For Miller, the gospel produces what Bonhoeffer called “costly grace” by awakening hearts to the beauty of Christ and His call to follow Him.

3. Rejecting the Reduction of Justification to the Forensic

Miller rejected the caricature—often leveled by Shepherd and others—that justification by faith alone promotes a purely “forensic” understanding of salvation. For Miller, justification is deeply personal and relational, inseparable from the work of the Spirit. As Bavinck put it, “Anyone who knows himself to any extent knows the finesse with which man can escape from God, and wrestle free from His grasp.” The gospel, Miller believed, confronts these evasions not through external demands but through the Spirit’s convicting and transforming work.

4. An Irenic Engagement with Shepherd

Miller’s critique of Shepherd was firm but irenic. He valued Shepherd’s desire to integrate faith and obedience but believed his framework introduced unnecessary theological confusion. Instead, Miller argued that the church must recover the gospel’s power to transform lives through the Spirit, rather than modifying the doctrine of justification to address concerns about nominalism.

Bonhoeffer, Shepherd, and Miller: Convergence and Divergence

Bonhoeffer, Shepherd, and Miller all sought to address the dangers of nominalism and the necessity of discipleship, but their solutions differ significantly:

• Bonhoeffer calls for costly grace but leaves the relationship between justification and sanctification ambiguous.

• Shepherd emphasizes covenantal obedience but risks conflating justification and sanctification, threatening assurance.

• Miller offers a distinctly Reformed response, showing that justification by faith alone is the foundation of spiritual vitality and the power for costly discipleship.

A Pastoral Word: Proclaiming Grace in the Face of Blindness

Jack Miller understood that addressing nominalism and legalism requires more than correcting behavior. It requires unmasking the hidden evasions of the human heart. As Bavinck observed, “To be really able to convict anyone else of sin, a person must know himself, and the hidden corners of his heart very well.” This conviction begins with the Spirit’s work, which cuts through our self-deceptions and draws us back to God.

To Pastors:

Pastors must first rest in the assurance of the gospel themselves as they call others to discipleship. Miller warned that when pastors lose sight of justification by faith, they risk projecting their own struggles and bad conscience onto their congregations, fostering a culture of legalism or fear and eventually nominalism. The gospel must first free the preacher before it can free the hearer.

To Congregants:

Bonhoeffer’s insight that many in the church are baptized non-Christians remains a sobering reality. But the solution is not to impose obedience as a prerequisite for grace. Instead, the gospel must be proclaimed in all the fulness of Christ and with clarity and power and conviction, awakening hearts to the joy of following Christ.

Conclusion: The Gospel of Costly Grace

The questions raised by Bonhoeffer, Shepherd, and Miller remain vital today. Bonhoeffer’s critique of cheap grace and call to costly discipleship resonate powerfully, but it is Jack Miller’s gospel-centered theology that provides the clearest path forward. Justification by faith alone, applied by the Spirit, is not only the foundation for discipleship but the power that makes it possible.

In a world prone to both cheap grace expressed in both nominalism and legalism, the gospel of costly grace is the only true hope. As we proclaim this message, may the Spirit convict, awaken, and transform, freeing us to follow Christ with joy and confidence.