The whole passage is this:
Eph. 2:8 For by grace are ye saved through faith; and that not of yourselves: it is the gift of God:9 Not of works, lest any man should boast.10 For we are his workmanship, created in Christ Jesus unto good works, which God hath before ordained that WE SHOULD WALK in them
The word ”it” is a translation from the Greek pronoun tοῦtο, and it is neuter in gender. It refers back to something just mentioned, and pronouns agree with their antecedent in gender and number. This rule argues against the identification of ”faith” as being the antecedent because ”faith” is a feminine noun.
The logical understanding is therefore that Paul referred to the whole previous clause with ”it”, and that it is SALVATION that is the gift of God. It is a gift since we do not earn it but offered to all of us, but it does not say that it is offered without conditions. The Bible makes it very clear that salvation is conditional upon repentance, and repentance requires a change of heart and that we must leave our old sinful life styles behind.
Moreover, if we insist on that it is ”faith” that is the gift of God in this verse (rather than salvation), the result might be horrendous. The result would be a tyrannical God choosing to give the ability to believe only to SOME (the lucky elect), while he withholds the same ability for the rest and even condemns people for their refusal to believe in him which he knows they could not do in the first place. The truth is that we are commanded to believe in him (1 John 3:23), and when we choose to come to him we must already believe in him (Hebr. 11:6). In fact, it is impossible to please God unless we have faith in him, so why would a loving God withhold this ability to most people and construct a scenario which he is not pleased about?
Salvation is by grace through faith, and it is the gift of God. Just like other gifts, the gift of God must be personally RECEIVED because God does not force his gifts on anyone (gifts are normally not forced on people). If we choose to accept the gift, we can decide to keep it for ever or throw it away after some time. The latter option would of course be extremely foolish, but it has happened that people have not taken care of God’s gift as they are supposed to. Gifts are normally free and nothing that you earn or pay for yourself. This does not mean that gifts could have no conditions tied to them.
For instance, you might decide that you will not give a gift to someone unless the receiver stretches out his/her hand to receive it and say thank you. If you send a gift to someone, he/she might not get the gift unless he goes to the post office to get it. You might also decide to give a car to your teenage son when he turns 18, provided that he stretches out his hands to get the keys and promises to obey the traffic rules, etc. He must also pay for gas himself to get his car to run. The teenage son did not do any work to get the car, and he did not pay a dime for it.
The reason why salvation is ”not of works” is because we can never cleanse ourselves from our past sins by starting to do good works later in life, and we have no authority to cleanse ourselves from our sins. We are totally dependent on God’s grace to be forgiven for our past. We do not earn our salvation with either works or faith. It takes one sin to be a sinner and in need of cleansing. This means that no matter how much good works we do, we still need to be cleansed from our past sins. This is why salvation cannot ever be by works. The Bible does not say that people are not saved unless they put in a certain amount of labor (like Muslims believe). Note that the verse makes no claim that salvation is unconditional, but only that it is not of works. Most importantly, Paul is often referring to works of the law (the 613 Jewish laws) and warns against Judaism. He is not preaching lawlessness, nor that it is optional to obey God!
Note the often neglected v. 10 which says that WE should walk in the good works that God has put before us, and God will not do the walking for us. We must carry our own cross, and it is not light as a feather. The message in the Bible is that we must repent and be faithful to him.
Paul does not contradict James, and James makes it clear that we are justified BY WORKS and NOT faith alone:
James 2:20 But wilt thou know, O vain man, that faith without works is dead? 21Was not Abraham our father justified BY WORKS, when he had offered Isaac his son upon the altar?—24Ye see then how that by works a man is justified, and not by faith only.
Rom. 6:16 Know ye not, that to whom ye yield yourselves servants to obey, his servants ye are to whom ye obey; whether of sin unto death, or of obedience unto righteousness?
Rom. 8:1 There is therefore now no condemnation to them which are in Christ Jesus, who WALK not after the flesh, but after the Spirit.— 13 For if ye live after the flesh, ye shall die: but if ye through the Spirit do mortify the deeds of the body, ye shall live.14 For as many as are led by the Spirit of God, they are the sons of God.
We are created to seek God and believe in him
Since we are created precisely to seek God and to have faith in him, it is possible to say that we all are provided the gift of believing from the very start.
Acts 17:26 And hath made of one blood all nations of men for to dwell on all the face of the earth, and hath determined the times before appointed, and the bounds of their habitation;27 That they should seek the Lord, if haply they might feel after him, and find him, though he be not far from every one of us
Rom. 1:19 Because that which may be known of God is manifest in them; for God hath shewed it unto them.20 For the invisible things of him from the creation of the world are clearly seen, being understood by the things that are made, even his eternal power and Godhead; so that they are without excuse:21 Because that, when they knew God, they glorified him not as God, neither were thankful; but became vain in their imaginations, and their foolish heart was darkened.
No one will ever stand before God and claim that he is condemned because God never gave him/her the gift of faith, because all men are commanded to believe and to repent (1 John 3:23 and Acts 17:30). God says ”Look unto Me and be ye saved all the ends of the earth” (Isaiah 45:22). God desires all men to come unto him (1 Tim. 2:4), and men are condemned for their failure to do so because they could (John 8:24; 3:18; etc.).
The Bible says that faith comes through hearing by the word of God, and this would be inaccurate if we are to understand ”faith” as a gift of God in Eph. 2:8-9.
Rom. 10:17 So then faith cometh by hearing, and hearing by the word of God.
”Eternal salvation” is indeed eternal, but we have not stepped into God’s eternal Kingdom yet. We could even say that the ”eternal gift” will still be eternal even if we throw it away, and then it will continue to be ”eternal” somewhere else but not in our possession. Who is eternal salvation given to? Apparently to those who obey God.
Hebr. 5:9And being made perfect, he became the author of eternal salvation unto all them that OBEY HIM
The Philippian jailer asked: ”What must I do to be saved?” (Acts 16:30). The response was not ”Nothing! You can’t do anything! You are dead and totally unable to respond to God until you are regenerated. You have no part in salvation. God must do it all.” Paul and Silas told the jailer that there was something that he could do and that was to believe in Lord Jesus Christ (Acts 16:31). Compare with how Peter answered a similar question in Acts 2:37-38). God must do the saving (man cannot save himself) but man must do the believing. God does not do the believing for man. We must also remember that if we truly believe in Jesus, which means that we love him, we also obey him – ”If ye love me, keep my commandments” (John 14:15).
Did the Israelites have no part in their deliverance from the deadly serpents as per Numbers 21? ”It shall come to pass, that every one that is bitten, when he looketh upon it, shall live”. The brazen serpent that God placed on a pole is a picture of Jesus Christ, also raised up on a ”pole” to draw people to himself. So what was the Israelites supposed to DO in order to live? They were supposed to look at the serpent of brass and God’s part was to heal them. This means, that if someone did not look at it, he was not healed. The Israelites obviously had no reason to boast even though they were healed, because they had absolutely no way of healing themselves without the mercy of God.
If God is the one who provides faith to certain individuals, why would Jesus be surprised about people’s great faith or lack of faith?
Matt. 8:10When Jesus heard it, he marvelled, and said to them that followed, Verily I say unto you, I have not found so great faith, no, not in Israel.
Matt 14:31 And immediately Jesus stretched forth his hand, and caught him, and said unto him, O thou of little faith, wherefore didst thou doubt?
Matt. 8:26 And he saith unto them, Why are ye fearful, O ye of little faith? Then he arose, and rebuked the winds and the sea; and there was a great calm.
Luke 12:28 If then God so clothe the grass, which is to day in the field, and to morrow is cast into the oven; how much more will he clothe you, O ye of little faith?
Matt. 15:28Then Jesus answered and said unto her, O woman, great is thy faith: be it unto thee even as thou wilt. And her daughter was made whole from that very hour.
John Calvin did not believe that the pronoun touto referred to ”faith”, and the same goes for Calvinists today. A Calvinist might urge people to pray that they will be granted the gift of faith, but this would result in prayers being the condition for salvation, and not faith itself. If God predestined people to be elect and non-elect from the foundation of the world, naturally prayers would not make difference.