I'm delighted that you have taken up this issue. I think that as long as we affirm that Scripture is our primary witness to God, then the “canonical approach,” in particular as Childs has envisioned it, still provides us with the most viable and challenging set of propositions. The problem is, as you have observed, that the name “canonical approach” has been adopted by so many that it is hard to know what it is exactly (see Schultz's article for something of the diversity amongst Evangelicals alone, let alone its more liberal fans, e.g. Rendtorff). The problem is exacerbated when Childs is consistently misrepresented . I struggle to find worthy interpreters (an aquaintance of mine has just written his doctorate on the subject. He writes that the Childs of the secondary literature is a "Frankenstein." Seitz is a refreshing and stimulating alternative). Brueggemann, for example, sometimes leaves me speechless. I often have the feeling that he simply wants to stick Childs in his pre-packaged box in order to make his own proposals easier to articulate. I've posted a series of rants and dialogues here. For a great critique by a great OT scholar, go here).
I've struggled to understand Childs myself over the past year or so (he's been practically the sole focus of my blog!). He's not easy, primarily because his thinking is so global (and because I have no formal training in theology!). As Seitz has pointed out in the best analysis yet (“The Canonical Approach and Theological Interpretation,” in Canon and Biblical Interpretation), Childs is often critiqued from opposing ends of the theological spectrum (e.g.some say he's too synchronic, some say he's too diachronic [e.g. Rendtorff on his Biblical Theology]). In my opinion, the trick is to locate Childs in his own “universe,” as it were, in order to understand his perception of both the nature of the text and the nature of its substance (its subject matter, Sachverhalt, res). It is from these concrete particulars that Childs works. They provide him with his orienting coordinates, rather than a commitment to a transcendent position outside of both church tradition and the textual witness. In this sense, ironically, I believe that it is Brueggemann, with his pre-commitment to “de-construction” (whether post-modern, psycho-analytic, or Marxist—his main dialogue partners), rather than Childs, who subordinates Scripture to an alien ideology (see possibly the best critique ever by Jewish scholar Jon Levenson in the Harvard Theological Review: “Is Brueggemann a Pluralist?”, in which he compares the two scholars). Childs actually takes the “risk of faith” that Brueggemann only manages to aestheticise. Out of his concrete and particular faith Childs draws a series of hermeneutical conclusions that have tremendous power. I personally think this is the correct way to proceed, as Christianity is marked by particularity. Answering the numinous question of “how we determine methods of theological interpretation”, as you put it, involves taking into account both the dogmatic and textual/historical dimensions of the reality in which we live.
So what is the “reality” within which Childs operates?
As far as I can see, his starting and finishing point is Barthian: God reveals himself, and that is what matters. He reveals himself by breaking into human history, consciousness, and reality, and that which is revealed is the sole significant content of the witness to this revelation, its one true love and the reason for its being. The reality itself is what matters, and it is God's will that this reality should be made know through the vehicles of human testimony. The human witness is thus a vehicle of revelation, a historically and culturally bound subject who functions to point beyond himself to something transcendent, though always done out of his or her own particularity. Out of this movement of God through human vehicle to recipient (the elect), we have a history, a real history in the usual sense of the word, of relationship between God's people and God. It is a relationship of promise and calling, as well as failure and judgement. Through the various media of divine revelation (prophets, priests, kings, sages, children, redactors, temple, text, cult, tradition …) a progressive revelation takes place in which God's people are pushed to recognise God and his ways ever deeper (the “I will be who I will be” in the Exodus, and not just God Almighty, for example). This history is outside the text, spans our present context, and reaches into the future to the consummation of all things. This is the true context of the modern exegete, though his or her stage in the narrative is admittedly different to that of earlier stages of God's economy (different are the means of revelation [two-testamental Scripture, apostolic tradition] and the apprehension of the “reality” [God in Christ]). The calling of the theological exegete is to live in this reality, to be transformed by it, and to witness to it for others. That is why we read the Bible: in order to understand its true subject matter, its true “substance,” or, as Thomas Aquinas and Calvin put it, its res. For Childs, then, true theological exegesis is always a matter of reading the text in light of its referent: we have to “pierce the text to its substance,” so that, for example, the word of Jeremiah becomes a vehicle for another word, which is the full reality testified only partially to by himself (hence, also, Childs' preference for a form of Christian allegory, with its assumptions of textual referentiality, over Jewish midrash, which really does treat the text as self-referential. See my post here.). This movement is circular: we understand the part in light of the whole, and the whole in light of the part (as the fragmentary witness is latterly fused with “its full ontological reality”).
Within this dogmatically construed history/reality, God's witness has taken on a particular shape, one that is relevant for our stage in the divine economy. It is the particularity, indeed the peculiarity of this odd witness that is key for Childs' approach. He doesn't appeal to Derrida, he simply analysis the Bible and Church Tradition to the best of his limited abilities and comes to certain conclusions. “Scripture,” in other words, is no general category of phenomena, in the light of which our particular species called “Bible” ought to be read. Rather, Scripture refers to this unique bequest, replete with its own form, shape, and demands.
So what is the nature of this witness, produced by this odd history?
Childs talks of traditions-become-text, over a long period of dialectical engagement between community, text, and res. God spoke once through his elected channels, this word was efficacious and registered itself among the elect. In other words, the witness (in whatever of the forms mentioned above) was a living vehicle, one that “pressed” for deeper fulfilment in time. Those who stood under its authority perceived with hindsight the fullness of the message, that, for example, Assyria was only a type of a fuller reality represented by Babylon and later Satan's kingdom, that the land was just a foretaste of something far more eschatological. This growing understanding was registered in the structure of the traditions themselves, ultimately taking more literary form. The process was thus kerygmatic, achieve its goal by hermeneutical manoeuvres. Witnesses were read in light of the fuller reality, and shaped appropriately, by subordination, relativisation, emphasis or simply juxtaposition (etc. etc.). As the tradition became stabilised (more or less, it is fairly irrelevant that this was never fully completed) in the form of an authoritative Scripture, it is logical that the final form that documented the fullness of this divine history/reality (hence my blog name, Narrative and Ontology). Yet even in this finalised, stable literary form, they still bear this full history of revelation that gave them birth, and still maintain within themselves the thread of “apostolic” continuity between the original witness, now buried under the redactional layers or lost to a now alien culture. This history constitutes the texts for what they are. If you ask, what kind of text is the Bible, this is part of the answer, and a refutation of Childs' approach must partly take place at this level. This history, this “ontology of scripture” (if that's the right phrase), has hermeneutical implications. We are to read the text according to its own being, as it were. Concretely, we are to read the text in relation to its substance, guided by the shape that has been given to the literature which functions as a regula fidei, a boundary marker for revelation, a kanôn, one with both positive and negative functions.
One thing is key to all this: the canonical process is marked by what Childs calls a Sachkritik, a criticism according to substance. That means that the redactors who shaped the traditions into what they became were doing so under the authority of the original word and were shaping the whole in light of what came before. The Psalms were paired with each other because they witnessed to a single reality, despite their diversity. It is the substance that guided the process and it is the substance that should concern us. Thus, post-modern attempts to playfully let texts rebound off each other are excluded. This also excludes that which Childs has falsely been accused of himself, namely treating the canon as “a stable universe of coherence and meaning,” as you put it. The unity of the canon does not lie at the level of the text, as if it can all be fit into a seamless dogmatic whole. The unity of the canon consists in its referent, that which the texts are about, in their various ways. The unity is “ontological,” as Childs ceaselessly put it (Brueggemann seems to refract the discord he finds in Scripture into the deity itself).
All this is contained in the single genre designator: Witness. I reckon Childs could have called his famous introduction an Introduction to the Old Testament as Witness. It's just that “scripture” describes the peculiar way in which it came to fulfil this function, the particular form it came to take. That the term on its own, understood without the content I've outlined above, can otherwise have a fairly innocuous meaning, can be seen by comparing it to Brueggemann's definition. For him, the text as witness does not mean witness to this peculiar ongoing reality with its peculiar historical results. It means, to quote him from his “ABC of Old Testament Theology,” the text as “linguistic utterance.” He thus proceeds by close analysis of words and sentences in their grammatical constituents, pitting propositions against each other with out taking into account, or at least respecting the authority of, a prophetic redactors decision to relativise one insight by subordinating it to another (for example in Qohelet).
I may be being overly harsh with Brueggemann. I was once a passionate Brueggemannanian myself and have read a fair few of his works. I think my greatest disappointment with him, despite his misrepresentation of what Childs is actually doing, actually comes from attempting to live out his approach. I tend to jump into things and I came across him at a time when I was hungry in general for an approach that took into account everything my cultural anthropology course and my experience of life was challenging me with. After a while, however, I felt living his gospel was like eating thin wafers that couldn't keep me going for the long haul, or even help me to witness to any substantial reality to my friends. Childs turned up providentially at the right time, and his approach has proved itself in the doing and living. I guess I could say that the canonical approach, the Childsian version of it, has proved to be a better vehicle of revelation, or rather has enabled me approach the vehicle that already exists in a manner that brings true life.
There is so much that has been left unsaid, and this comment is too long as it is! I've taken the time because, as you know, I respect this blog and your opinions and would appreciate critical response from a dogmatist, someone whose job is to wrestle with the reality beyond the text! Feel free to tear apart what doesn't make sense …