The Reformed tradition does not agree on how to understand the relationship between “grace” and “merit.” Merit is about the value of actions. A meritorious action is an act to which God owes a reward. More precisely, a meritorious human action is a good work that justly requires a holy God to reward it. Conversely, “grace” is a reward God gives to someone who has not merited it. It is a gift God freely gives to someone who not deserve it.
Calvin deplored the term “merit” because he believed it an unnecessary philosophical addition to the teaching of Scripture. He abhorred the idea that a creature could merit anything from God because that would imply that the creature is independent of the Creator. The good works of human beings do not originate from themselves. Rather, the good works human beings do are themselves grace gifts of God. Therefore, human beings can never be said to merit anything by their good works. The rewards God gives to good works are, to borrow a phrase from Augustine, “grace upon grace.”
One interesting implication of Calvin's denial of merit is that there is no reason to exclude human works from justification. Now, Calvin did clearly exclude human works from justification and affirmed imputed righteousness along with its corollary: faith alone. But, if good works are gifts of God's grace and have no merit in themselves, then it is not necessary to exclude them from justification in order to retain the gracious character of justification. Perhaps this is why Calvin didn't fault Augustine too much for holding exactly that viewpoint. What Calvin opposed was the Roman Catholic notion of meritorious human works in justification, which human beings independently added to God's grace.
But, there are a few questions that emerge from Calvin's view. First, if human beings cannot merit anything before God, then should we also deny that the human nature of Christ merited eternal life by His righteousness? Second, if human beings cannot merit anything before God by their good works, then why is it important to deny a place to good works in justification? Third, if the good works of human beings cannot merit reward from God, then why should we affirm that the sins of human beings de-merit a penalty from God? This third question leads to some controversial matters, but Calvin taught that the creature is never independent of the Creator, even when the creature sins. And, if the creature is dependent upon the Creator, even when he sins, then how can the creature de-merit a penalty from God as if his sins originated independently of God?
In another post, we'll examine some developments in later Reformed Orthodoxy that sought to answer the questions above.