Here are some quotations from an article on justification by Protestant author William Webster, "The Biblical Teaching of Justification," in which he articulates the typical Protestant perspective (although see the end of this piece where I provide a link to an article in which I show that this sort of Protestant language can be interpreted in a different, more Catholic-friendly way):
Because of God’s holiness man needs a righteousness that will truly justify him before God. Such a righteousness must be the perfect fulfilment of his law. The wonderful news of the gospel is that when a man is united to Jesus Christ he is given that righteousness as a gift, the righteousness of God, a righteousness which fully satisfies the justice of God and secures for the believer an eternal standing of acceptance and forgiveness before him. But what is the righteousness of God? Is it a righteousness that man is responsible for producing, partially or wholly, or is it a righteousness accomplished completely apart from man’s activity, given solely as a gift? It is imperative that we understand the biblical teaching on this matter. If this truth is distorted then the biblical meaning of justification will be distorted with tragic and eternal consequences. . . .
Justification is a forensic (legal) term which deals with acquittal from the claims of the law. It is based upon the atonement of Christ which was offered in the context of legal demands. Again, we see the direct connection between justification and the atonement in Romans 5:9 which states that we are ‘justified by His blood.’ Justification is a declaration of a righteousness based on the imputation of the righteousness of Christ. Justification does not mean to ‘make righteous’ morally, but to declare to be righteous legally. It has to do with a person’s legal status before God the holy Judge. This is the particular meaning the word justification has within the overall context of salvation. It means to be acquitted from guilt, to be set free from condemnation and to be fully accepted by God. . . .
Because the righteousness which justifies is a gift of God, justification then is also a gift. The righteousness that justifies us is something completely external to us. This is why the Reformers called it an ‘alien righteousness’. . . .
So the basic thrust of Paul’s teaching on imputation in Romans 4 is this: In justification God imputes or credits a completed righteousness, the obedience of Another, to the one who comes by faith alone to Christ. This results in an eternal state of forgiveness and acceptance with God. On the basis of that imputed righteousness God comes to a settled evaluation about the individual—he is judged to be righteous. . . .
So how does sanctification, or the process of God's making us holy inwardly by his grace, come into this?
Works do not save or justify. But a saved life will demonstrate itself in a life of sanctification and faithful service to the Lord. This was the consistent teaching of the Reformers and all those who are true to their teaching. In teaching faith alone neither Calvin or Luther ever implied that one could be justified and yet go on living in sin. They taught what scripture teaches: that when an individual is saved he is eternally justified, but also regenerated, sanctified and adopted. Justification is but one aspect of the overall work of salvation, as is sanctification. Although both doctrines come under the general heading of salvation they are not interchangeable terms. They are separate blessings which flow simultaneously from union with Christ. The Protestant Reformers affirmed the biblical teaching of imputed righteousness for justification as well as, and in addition to, the necessity for regeneration and the indwelling of the Holy Spirit for sanctification, but without confusing the terms. They consistently taught that justification is by faith alone but by a faith evidenced by or which necessitates the works of sanctification. So the emphasis of the Reformation was upon a twofold understanding of righteousness. Firstly, in justification there is the imputation of the righteousness of Christ and secondly, by the indwelling of the Holy Spirit, there is the living out of the righteousness of sanctification. . . .
Justifying righteousness is a separate concept and work from that of sanctification though they both come under the general heading of salvation. Justification and sanctification are not interchangeable terms in the New Testament. They are two entirely different aspects of the overall work of salvation. Paul maintains that the righteousness that justifies is a person, the Lord Jesus Christ: ‘By His doing you are in Christ Jesus, who became to us...righteousness.’ He does not say that Christ is the source of grace by which a person may become righteous through sanctification. He uses the term sanctification for that. When he uses the word righteousness with respect to justification, the apostle is underscoring the wonderful truth that in Christ God provides a completed righteousness, apart from the works of man. This righteousness instantly and forever justifies an individual by conferring upon him a legal state of eternal righteousness. It is a righteousness which has fulfilled the just demands of the law of God. . . .
This view of justification raises significant and difficult questions. If imputed righteousness, considered as distinct from inward righteousness, by itself makes us fully morally acceptable to God, then what is the point of sanctification? What purpose does it serve? It would seem that God doesn't care about our inward moral condition. Whether we love him with all our hearts, or spit in his face with total hatred, it is all one to him, since our inward moral state has nothing whatsoever to do with our moral acceptability to God. Consider two individuals standing before God: Bob and Frank. Bob loathes God with all of his being, and declares his willful rebellion against him and all that he is and stands for. He also hates his neighbor, and declares himself anxious for the next opportunity to murder, rape, pillage, and torture helpless innocents. Frank is a holy servant of God who loves him with all his heart, who has given up all to serve him, and who is willing to sacrifice himself for the welfare of his neighbor and has done so many times. Bob died in a shootout with police as he was finally caught raping and assaulting a child. Frank died as a martyr standing up for social justice for the oppressed in the name of Christ. But Bob and Frank have something in common: They have both received the imputation of Christ's righteousness. If the doctrine of justification we are considering here is true, then God considers Bob and Frank to be morally equal, both fully morally acceptable. God declares that both Bob and Frank are completely just individuals whom his moral law has nothing whatsoever to object to.
Now, I know what Protestants will say at this point: "You're caricaturing our view! We've always maintained that justification cannot exist without sanctification!" Yes, they maintain that, but this rebuttal misses the point. Although I grant that such a situation as described above could never actually happen in the Protestant system, yet as a thought experiment it is very revealing, and I would ask Protestants to stand back a bit from making an instant rebuttal and consider carefully the issues it raises. Protestants like William Webster insist strongly that sanctification plays no role whatsoever in making us acceptable to God, because that is accomplished completely and solely by the imputation of Christ's righteousness. So even though sanctification does in fact always accompany justification, it has nothing to do with making anyone any more acceptable to God. It adds nothing to any person's acceptability. That is why my thought experiment with Bob and Frank, although in some ways unrealistic from a Protestant point of view, yet captures an aspect of the Protestant reality that I think Protestants too easily gloss over. In fact, the reason why they so quickly jump to the rebuttal and emphasize that sanctification always accompanies justification is undoubtedly partly because they recognize that God could never consider a person like Bob, in that condition, as righteous and just and fully morally acceptable. They recognize that God's moral character could not but scream in protest and rejection against any person in that state, and that the only way it would make any sense for Bob to be considered morally acceptable to God would be for Bob's character and inward condition first to be changed by God's grace (sanctification). They get angry when people like me present a thought experiment like the one above because they don't want people to get the impression that they think a person like Bob would be acceptable to God, because they recognize the complete moral absurdity of that idea. And they are right: The idea is completely morally absurd. Why is it absurd? Because we recognize that God cannot be morally indifferent to a person's inward moral condition, that such a condition cannot but play a central role in how morally acceptable that person is to God. But this recognition is death to the Protestant doctrine of justification, because its central point whereby it distinguishes itself from the Catholic doctrine is precisely that people come to be morally acceptable to God completely apart from any input from their inward moral condition. That is, justification is distinct from sanctification. As William Webster points out in his article, "the whole concept of imputed righteousness for justification has been mocked by the Roman Catholic Church. She calls it a legal fiction." I wouldn't use the term "mocked," but yes, Catholics tend to think of the Protestant view as a legal fiction--because that's exactly what it is. The fiction is the idea that God has no concern for the inward moral condition of a person, that he could find a person of despicable moral character totally morally acceptable. The idea of God declaring something to be true which is patently obviously not true is well described by the word "fiction."
The Catholic view, on the other hand, first worked out in a systematic way (outside of Scripture) by St. Augustine, holds that justification includes sanctification because God makes us fully acceptable to him not by imputation alone but also by infusing righteousness into us and changing our actual condition. Here is a definition of justification from the Catechism of the Catholic Church, #1989-1992 (footnotes removed):
1989 The first work of the grace of the Holy Spirit is conversion, effecting justification in accordance with Jesus' proclamation at the beginning of the Gospel: "Repent, for the kingdom of heaven is at hand." Moved by grace, man turns toward God and away from sin, thus accepting forgiveness and righteousness from on high. "Justification is not only the remission of sins, but also the sanctification and renewal of the interior man.
1990 Justification detaches man from sin which contradicts the love of God, and purifies his heart of sin. Justification follows upon God's merciful initiative of offering forgiveness. It reconciles man with God. It frees from the enslavement to sin, and it heals.
1991 Justification is at the same time the acceptance of God's righteousness through faith in Jesus Christ. Righteousness (or "justice") here means the rectitude of divine love. With justification, faith, hope, and charity are poured into our hearts, and obedience to the divine will is granted us.
1992 Justification has been merited for us by the Passion of Christ who offered himself on the cross as a living victim, holy and pleasing to God, and whose blood has become the instrument of atonement for the sins of all men. Justification is conferred in Baptism, the sacrament of faith. It conforms us to the righteousness of God, who makes us inwardly just by the power of his mercy. Its purpose is the glory of God and of Christ, and the gift of eternal life:
That just makes a whole lot more moral sense, doesn't it? Notice that the Catholic view affirms just as much as the Protestant view does that justification is a gift of God's grace, not earned by any merits of man. That is not where the views differ. The difference is that Protestants who hold this sort of view think that salvation cannot be said to be an act of grace if our works contribute in any way towards our acceptance with God. But why would this be? If our works, and our inward righteousness, are themselves completely the product of God's grace and are given to us as a free gift, merited not by ourselves but by the Passion of Christ, then how does the mere fact that we recognize that the inward change produced by grace is important to God in terms of his moral acceptance of us lessen in any way the pure graciousness of salvation, or our gratitude to Christ for it, or our giving all glory to God on account of it?
If you thought this was interesting, you might like this article, where I go into all of this in more detail, including a detailed analysis of key biblical texts. You might also find this article interesting, in which I consider another way of thinking about the meaning of the Protestant doctrine that renders it more palatable to moral sense and which puts it in line with the substance of Catholic teaching. (This is the form of the doctrine that I myself held as a Protestant.) And see here for more general thoughts on the topic of the Catholic doctrine of salvation.
Published on the feast of Sts. Nereus and Achilleus
ADDENDUM 5/13/16: To return briefly to the question asked earlier, in the Protestant doctrine of justification (as frequently construed), what is the point of sanctification? God is fully morally satisfied with justification, which makes us completely acceptable to him on its own without any help from sanctification. Perhaps it might be said that sanctification is important because we could not be happy in heaven without it. Although God has no moral problem with Bob, perhaps Bob would not be happy in heaven living with a being he hates so much. At least on God's part, perhaps this could be solved if God would simply impute Christ's happiness to Bob, while leaving Bob internally miserable. It worked with righteousness, after all, so why not with happiness as well? Then God would not at all be grieved by Bob's continuing inner unhappiness, since Bob would be really happy and not miserable because he has an imputed happiness which is fully sufficient. Of course, Bob may himself not be satisfied with this arrangement, but perhaps he should be, for why should Bob not be satisfied with that which satisfies God? If Bob complains, "I'm miserable!" and God replies, "No, you're actually fully happy, for I have imputed Christ's happiness to you, and so I view you as fully happy," I suppose that ought to be enough. If God views Bob as fully happy, who is Bob to view things otherwise? (Of course, the problem is that it is obvious that it is nothing more than a legal fiction to declare an inwardly miserable person happy by means of imputation alone. But, again, if we can do this with righteousness, why not with happiness? I see the same objection applying to both, and if the Protestant answer suffices for the one I don't see why it wouldn't suffice for the other.)
ADDENDUM 6/2/16: Here is a new article that carries these same themes further.