Here is one of my favorite essays. A small sample:
In the second chapter of his Epistle at vs. 21, James says that Abraham our father was justified by works, and in vs. 24, he draws the conclusion that a man is justified by works and not by faith alone. How is this to be reconciled with Paul who says that justification is by faith apart from the works of the law (Rom. 3:28; Gal. 2:16)?
With respect to the meaning of justification in James there are basically two options open to the interpreter. First, justification can be understood in a forensic sense. This is the sense in which Paul uses it and it means that in the judgment of God a man is declared to be just. This forensic sense in James would, however, appear to leave us with a flat contradiction between James and Paul. For this reason other interpreters have suggested that James uses justification in a demonstrative sense. If the references to justification were purely demonstrative in force, James would be saying that Abraham by his works showed himself to be an inherently just, upright, or righteous man. He showed himself to be a good man.
There are at least two problems with such an understanding, however, and these constitute decisive objections to it. First, if “justify” were understood in a purely demonstrative sense there would still remain a contradiction between Paul and James. In Romans 4, Paul puts forward Abraham as the model of an ungodly man to whom righteousness is imputed for justification. James, however, would put forward Abraham as the model of one who is inherently a godly or righteous man. Both authors appeal to the same text, Gen. 15:6, but in order to establish two utterly diverse conceptions. If James were right in his interpretation of Gen. 15:6, this verse would contradict the very purpose for which Paul appealed to it. Conversely, if Paul were right, James could not use the verse to establish an inherent righteousness.
The second objection to the demonstrative sense is that this sense does not naturally arise out of the context. It interrupts the flow of the argument in James. It says something which may be true but which is irrelevant for his main purpose. This will become clearer as we consider the central thrust of the passage further.
A popular understanding of James’ use of “justify” has been developed which is usually thought to be the demonstrative sense but which is really a hybrid of the demonstrative and forensic senses. In this view, Abraham by his works showed himself, not to be just (i.e., the purely demonstrative sense), but to be justified. He showed himself to have been declared just. This view is attractive because it maintains the flow of the argument and does not contradict Paul. The decisive argument against it is simply that it is linguistically highly improbable. The Greek word translated as “justify” does not bear this meaning elsewhere. Justify can mean “declare to be just” or “show to be just,” but it cannot mean “show to be declared just.” Therefore this third option must be dismissed as unacceptable.