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Once an orthodox priest told me that Protestants themselves don't know what they need the sacraments for. He said that since they deny the doctrine of transubstantiation and have separated themselves from Apostolic succession of the universal Church, they don't experience the partaking of the divine nature (2 Peter 1:4) through sacraments, especially through Eucharist.

He also said that Protestants' assertion that the sacrament of Eucharist is only needed as a reminder is rather ridiculous as "anyone can be reminded of that through hearing a sermon or through reading the Word". He said he doesn't deny that Eucharist has a function of a reminder, but there are some way deeper things pertaining to Eucharist that Protestants completely miss out on.

Honestly, he kind of needled me by that.

However, I am asking this question not so as to argue with him in the future, but to find out what Protestants themselves have to say on this regard - how do they view the purpose of sacraments.

I address this question to all Protestant Christians, in other words to those Christians who believe that Jesus Christ is the Son of God, and the very God Himself as God the Father is, and who also believe that there couldn't be one man who would solely be a representative of God to the Church, and those who also believe that the Universal Church can be spread and grow through merely sharing and hearing the Gospel, regardless of whether or not the one who shares that Gospel belongs to the Apostolic succession.

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There is no one Protestant view. For an overview of the different views held by the different denominations, see this Wikipedia article. –  zpletan Jun 13 '12 at 15:54
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Let me preface this with a note that the view I present does not think it serious to hold a more traditional view. Unity on other matters make this subject peripheral.

Another common view is among popular evangelicalism that would not try to defend their emphasis on the sacraments, but oppose an over emphasis by others. From their view the need for any kind of visible succession is more or less superstition. The situation with Jesus at the well with the Samaritan would seem similar. The woman was not very spiritual. She could not help worrying about external rites. She did not know which mountain to worship on. Should she worship at the visible, material mountain from her holy men's traditions, or the one from the Jew’s traditions? Jesus said it does not matter:

Yet a time is coming and has now come when the true worshipers will worship the Father in the Spirit and in truth, for they are the kind of worshipers the Father seeks. 24 God is spirit, and his worshipers must worship in the Spirit and in truth.” (John 4:23-24)

In a similar way, most evangelicals think the Catholic Church was like a snowball of superstition. Starting to collect superstitions, around the time of Constantine, until Luther, the snowball formed. At this point the Church and its Traditions had become a molted layer of dead skin, with the 'histoblast' of a butterfly forming, which is the reformation under Luther.

Yet Luther attached 'spooky' 'superstitious' ideas about Baptism and The Lord's Supper still, so we have not yet arrived at the popular view I am explaining as one alterative view. By ‘spooky” I mean Luther believed that there is “the Real Presence of the body and blood of Christ in the Christian Eucharist.” (sacramental union) and although not fully believing in baptismal regeneration (that water baptism was necessary for salvation) he did seem to infer that salvations was more intimately linked to baptism than later reformers.

Most feel it is easy to forgive Luther on this point because having been raised under so many superstitions; one cannot expect full departure in one man. Therefore during the next generation, or two, or three, we find the lead being taken by the independent Puritans, like John Owen, some of who settled into America, like the Presbyterian Jonathan Edwards. America, having possibly the most independant evangelical community, now also has a strong contingent of Baptist churches, who in addition to strictly taking a symbolic view of the sacraments, also reject infant baptism altogether.

For example John Owen, a leading Puritan in the mid 1600’s, though still quite traditional, said the following with regard to the Lord’s supper:

Do the elements remain bread and wine still, after the blessing of them?...Yes; all the spiritual change is wrought by the faith of the receiver”

This is clearly different from Luther.

Or with regard to the Lord’s supper:

Regeneration doth not consist in these things, which are only outward signs and tokens of it, or at most instituted means of effecting it...The apostle really states this case, 1 Peter 3:21, “In answer whereunto even baptism doth also now save us (not the putting away of the filth of the flesh, but the answer of a good conscience toward God), by the resurrection of Jesus Christ.” The outward administration of this ordinance, considered materially, reacheth no farther but to the washing away of “the filth of the flesh;” (John Owen's Works Volume 3 P268)

Taking great emphasis on the 'inner reality' of regeneration as opposed to the 'external practice' of the Lord’s Supper, Jonathan Edwards (considered by many as one of the most influential evangelicals in American history) was excommunicated from his own church. only latter to be asked the he might forgive them! This was partly because Edwards's became convicted that unless someone is really a regenerate believer, they should not partake in the Lord’s Supper. For people should not perform and external rite symbolizing something that has not actually occurred inside them. His argument was published in a book entitled, Qualifications for Communion (1749). (Refer to Works of President Edwards Volume 1, Page 276)

Regarding the two sacraments themselves, Baptism primarily is seen as a New Testament version of circumcision, symbolizing the cutting away the sinful flesh, including all of its superstitions by faith. It symbolizes dying to the world and rising in Christ. There was nothing spooky about circumcision.

The Lord's Supper, the only repetitive practice, is seen as a very solemn means to enforce the creed that Christ and His works are all that matters, our works have little importance. This emphasis is seen as so important, that if you blaspheme against it as some did in Corinth, you could create scandalous shame that God would have to publicly manifest His displeasure, as He did in Corinth.

30 That is why many among you are weak and sick, and a number of you have fallen asleep. (1 Corinthians 11:29-30)

So although this large portion of evangelicals largely avoid any link with ancient church tradition, they take their freedom about these matters seriously.

Their 'succession' of tradition is not through Popes or Saints but faith like Abraham's. Succession even through one man is enough for them, but even in the dark ages, it was not as bad as Noah's time regarding numbers of true church leaders.

The Bible is viewed as the only authority on the matter and all ‘holy’ tradition praised or condemned on that basis.

I should mention I am not representing the whole evangelical view, or of even the average view. The fact is, there are many views. But I have presented a view that does not think the emhasis should in any way be placed on the external form of religion.

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I don't think I can agree with your assessment of the Puritans. Have you examined Calvin's interpretation of the sacraments? Regarding the entire post, I think that you should post links to some quoted resources so that if I am to learn something here, I shouldn't think you're making it up. –  San Jacinto Jun 14 '12 at 11:17
    
@San, I genuinly thank you for noticing that. I re-phrased it a bit to refer to known facts and tried to be clear that this is just one view. By the way its probbaly just semantics, I do not consider Calvin a Puritan, though most Puritans were Calvanists. I tried to make that clearer as well. Cheers –  Mike Jun 14 '12 at 14:31
    
I look forward to reading the edit later, thanks. I didn't mean to suggest that Calvin was a Puritan, only that most Puritans were Calvinists and Calvin definitely had a view of the sacraments that was different from Zwingli. –  San Jacinto Jun 14 '12 at 14:39
    
This: Their 'succession' of tradition is not through Popes or Saints [(or Apostles)] but through faith like Abraham's. Sacraments are things that are commanded. To fail at a sacrament is to sin (which is bad enough), but no more. –  Joel Coehoorn Jun 14 '12 at 21:30
    
@Joel - if by 'fail to do' you mean do not practice baptism or the lord's supper than virtually anyone called christian would say amen. If meaning fail to do like so-and-so's tradition, then we also need to add [angel from heaven] Galatians 1:8 But even if we or an angel from heaven should preach a gospel other than the one we preached to you, let them be under God’s curse! Only tradition deposited in scripture carries the authority of gospel. This is the whole argument in a sentence. –  Mike Jun 14 '12 at 23:53
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Asking "What do Protestants think about the sacraments?" is a bit misleading. There are a large variety of Protestant views, some of them are more traditional than others. The question as to whether Protestant groups are wholly divorced from the Apostolic succession is also not 100% correct. There are a few clearly Protestant groups who have at least some claim to succession (Certain Anglicans, the Old Catholic Church, etc.).

This is a statement from the Presbyterian Church of the USA (PCUSA):

In the words of John Calvin, sacraments are "a testimony of divine grace toward us, confirmed by an outward sign, with mutual attestation of our piety toward [God]." A sacrament is a testimony of God's favor toward the church, confirmed by an outward sign, with a mutual testifying of our godliness toward God. It is a primal, physical act that signifies a spiritual relationship between personal beings.

Here's the Lutheran perspective (ELCA):

Contemporary theologians, especially Edward Schillebeeckx, have said that Christ is the "primordial sacrament." The grace that is received in the sacraments is the grace of Christ. In the two sacraments of Baptism and Eucharist Jesus Christ is the content of the sacrament as well as the minister of the sacrament. In both sacraments it is the whole Christ who encounters us. The sacraments are wonderful ways in which Christ is present to us. This is not to deny that Christ is present to us in other ways as well, but if we look at Christ’s command and Christ’s promise it is obvious that two actions are central.

The United Methodist Church (UMC) has similar thoughts:

Like baptism, Holy Communion is regarded by Protestants as a sacrament. That is, it’s an act of worship ordained by Christ and is a means of grace. This does not mean that we become any more worthy of God’s grace by taking part in Communion. Rather, we open ourselves to the divine love that’s already there; we become more ready to receive that love and to respond to it.

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