Article XVIII: Of Free Will.
1] Of Free Will they teach that man's will has some liberty to choose civil righteousness, and to work 2] things subject to reason. But it has no power, without the Holy Ghost, to work the righteousness of God, that is, spiritual righteousness; since the natural man 3] receiveth not the things of the Spirit of God, 1 Cor. 2, 14; but this righteousness is wrought in the heart when the Holy Ghost is received 4] through the Word. These things are said in as many words by Augustine in his Hypognosticon, Book III: We grant that all men have a free will, free, inasmuch as it has the judgment of reason; not that it is thereby capable, without God, either to begin, or, at least, to complete aught in things pertaining to God, but only in works of this life, whether good 5] or evil. "Good" I call those works which spring from the good in nature, such as, willing to labor in the field, to eat and drink, to have a friend, to clothe oneself, to build a house, to marry a wife, to raise cattle, to learn divers useful arts, or whatsoever good 6]pertains to this life. For all of these things are not without dependence on the providence of God; yea, of Him and through Him they are and have their being. "Evil" 7] I call such works as willing to worship an idol, to commit murder, etc. 8] They condemn the Pelagians and others, who teach that without the Holy Ghost, by the power of nature alone, we are able to love God above all things; also to do the commandments of God as touching "the substance of the act." For, although nature is able in a manner to do the outward work, 9] (for it is able to keep the hands from theft and murder,) yet it cannot produce the inward motions, such as the fear of God, trust in God, chastity, patience, etc.
Article XVIII of the AC is, in effect, the flip side of article IV on justification. Less words are employed (especially in the apology; speaking of the apology to the AC by Melanchthon on article IV, there probably has been no clearer exposition or essay on justification ever written- it warrants constant re-reading and referral); nevertheless, the issue of justification is the theological side of the anthropological question regarding the freedom of the will, and vice versa. It is not surprising that the old Adam rails and rants over the issue of free will, because we have a free will, right?
The AC employs the distinction between things below and things above. Things below us are indeed those things related to civil righteousness, obeying the law, treating our families with respect, choosing blueberry rather than strawberry jam as a breakfast spread for toast, that sort of thing. Things above are those things related to justification before God. In the first instance we are free, in the second instance we are bound. In the first, the free will, through the employ of reason, makes decision willfully. In the second, the bound will does nothing unless the Holy Spirit works righteousness in the heart through the hearing of the Word.
An easy distinction to make, in theory, but much more difficult in practice, as is also witnessed by the conclusion of the article. For although in terms of outward works the free will might be able to do "good" works, the free will is unable to work the inward motions, those things that actually make good works good works in the first place. That is to say, we can follow the law and restrain the hand, but if these good works do not proceed from love of God, trust in God, etc., if they do not come out of regard for the first table of the law, then they are not good works in any event. They become instead self-righteous works detrimental to salvation because they are regarded as just and not attributed to the Holy Spirit and faith worked in us by the power of the Word. Furthermore, they are not acts of the free will, at least not in a completely free sense, "for all of these things are not without dependence on the providence of God; yea, of Him and through Him they are and have their being." Even our freely willed actions are dependent on God's providence.
So the article ultimately calls into question any freedom of the will at all, even while it allows for some semblance of that freedom, "some liberty", a dubious liberty at best, not really to be relied upon, for the good itself is worked upon us, in us and through us by God, both the good done below and our righteousness before God. Which is to say, this thing called "free will" is a shadowy beast possibly best left hidden under more beautiful gifts like righteousness, justification, and the Word, which do everything.