Differing Views
Advocates of penal substitution argue that the concept is both biblically based and rooted in the historical traditions of the Christian Church (although others say that the theory was developed later, in the Reformation period). Critics, however, argue that the theory of penal substitution is solely a later development, only forming part of orthodox Christian thought during the Protestant Reformation of the 16th-century, being advocated by Martin Luther and Calvin.
It has traditionally been compared with the so-called classic theory, that Christ's death represents the cosmic defeat of the devil to whom a ransom had to be paid (or the rescue of humanity from the power of sin and death), a view popularised by Gustaf Aulén; and secondly with the notion that the cross had its effect on human beings, by setting forth a supreme example of godliness or by blazing a trail which we must follow or by involving mankind in his redemptive obedience, the so-called subjective or exemplary theory associated with Peter Abelard and Hastings Rashdall.
On the other hand, those teaching an interpretation of the Cross consistent with penal substitution reject such a characterization of their beliefs. Their theory teaches that Christ's cosmic defeat of the devil was accomplished because Jesus suffered the penalty for mankind's sins. Under this view, the nature of Satan's authority over humanity comes from mankind's problem of sin, but by Jesus' cross, the guilt of sin before God is paid for and erased, the devil has no more power over the person saved. (Romans 3:25)
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