The argument which McDowell calls the "trilemma" is popular among amateur apologists for Christianity. It was first popularized by C.S. Lewis, and has become even more common since McDowell reworked it. It is logically weak, but it is rhetorically powerful--as its popularity and recurrence attest--and so worth considering in more detail than it might otherwise merit.
The name "trilemma" is somewhat misleading. Traditionally a dilemma is a situation in which one is faced with two or more alternatives, each of which is somehow bad or unpleasant. "Trilemma" and the trifurcate phrase "Lord, Liar, or Lunatic" (LLL) suggest a three-way decision, two of which (according to the argument) constitute a dilemma, thus favoring the third. Structurally it might more accurately be viewed as a binary decision in which one of the branches is asserted to lead to a dilemma, thus favoring the other branch.
The original form of the argument as made by Lewis was ostensibly directed only at refuting the claim, sometimes advanced, that Jesus was a great moral teacher, but not God. In a nutshell: "If Jesus' claims are not true, then he was either lying about them (which is morally reprehensible) or he was deluded into believing them, which would make him a raving madman (whom nobody would respect as a teacher); thus he couldn't have been a great moral teacher." Lewis's version was originally for a radio broadcast, and is probably more properly construed as a rhetorical argument rather than a formal logical one.
Lewis's actual argument as expressed in Mere Christianity:
I am trying here to prevent anyone saying the really foolish thing that people often say about Him: "I'm ready to accept Jesus as a great moral teacher, but I don't accept His claim to be God." That is the one thing we must not say. A man who said the sort of things Jesus said would not be a great moral teacher. He would either be a lunatic--on a level with the man who says he is a poached egg--or else he would be the Devil of Hell. You must make your choice. Either this man was, and is, the Son of God: or else a madman or something worse. You can shut Him up for a fool, you can spit at Him and kill Him as a demon; or you can fall at His feet and call Him Lord and God. But let us not come with any patronizing nonsense about His being a great human teacher. He has not left that open to us. He did not intend to.
"Ostensibly" is used above because although this limitation of scope is often raised in Lewis's favor when the LLL argument is criticized, the particular language Lewis chose is at least suggestive of the dilemma interpretation McDowell will take. Few people in our society (and fewer in the Britain of the 1940's) go so far as to consider Jesus "the Devil of Hell" or a raving lunatic, and by setting these up as the only alternatives to complete acceptance of Jesus' claims, there is an implication that the claims must therefore be true. In point of fact, Lewis ends one chapter (originally, one radio talk) with the quote above, and expands on it in the beginning of the immediately following one:
We are faced, then, with a frightening alternative. This man we are talking about either was (and is) just what He said, or else a lunatic, or something worse. Now it seems to me obvious that He was neither a lunatic nor a fiend: and consequently, however strange or terrifying or unlikely it may seem, I have to accept the view that He was and is God. God has landed on this enemy-occupied world in human form.
This is the line of argument McDowell takes. He doesn't expand much on Lewis's basic argument, but provides a number of citations in favor of Jesus' morality and sanity. In a nutshell, "If Jesus' claims are not true then He was either a demon or a lunatic. But everyone knows Jesus was neither, so He must be Lord and God."
In either case, this argument is flawed. First, it relies for impact on a premise which is is both ambiguous and controversial, which is the question of just what "Jesus' claims" were. Second, it makes unwarranted extrapolations from the general idea of saying something known not to be literally true to the worst sort of malicious lying, and from believing something which is not true to raving lunacy. This second point is dependent upon the first, as the degree to which one can validly make such extrapolations depends on what the claims in question are, but on a reasonable view they go too far in any case.
Addressing this argument requires some degree of caution: the basic criticism lies in the fact that none of the three horns of the "trilemma" actually represent a single possibility, but rather a broad spectrum of possibilities. All that is logically required to refute the trilemma is to show that the decision "Who is Jesus of Nazareth" cannot be reduced to three and only three clear-cut possibilities. It is not necessary to positively answer the question--indeed it may be impossible to conclusively answer it.
This basic criticism of the trilemma is echoed by Christian apologist William Lane Craig:
An example of such an unsound argument would be:
- Jesus was either a liar, a lunatic, or Lord.
- Jesus was neither a liar nor a lunatic.
- Therefore, Jesus is Lord.
This is a valid argument inferring one member of a disjunction from the negation of the other members. But the argument is still unsound, because the first premiss is false: there are other unmentioned alternatives, for example, that Jesus as described in the gospels is a legendary figure, so that the trilemma is false as it stands.
Jesus claims to be God
Lewis speaks vaguely of "the sort of things Jesus said" and "just what He said," while McDowell comes right to the point:
Jesus claimed to be God. He did not leave any other options. His claim to be God must be either true or false and is something that should be given serious consideration.
Exactly what Jesus claimed is not known. The gospels are the closest thing we have to an account of his claims, and there is no explicit claim of divinity by Jesus in the gospels, let alone an unambiguous theological statement of what precisely it might mean for a man to claim to be God. (Obviously the Christian church came to think that Jesus was God, though even they had trouble determining what that meant, as witnessed by centuries of "heresies" concerning this issue). Much of what is often interpreted as suggesting divinity comes from the fourth gospel, but this is considered to be of relatively late authorship (compared to the synoptics) and may reflect theological ideas developed in the early church or those of the author, and may thus be removed from the actual claims/sayings of Jesus. This is not to urge a particular interpretation of John, but to make the point that there is not a clear consensus on the historical claims of Jesus, or how his words as we have them should be interpreted in context.
In the various gospel accounts Jesus' followers and those who turn to him for miracles treat him as a holy man, certainly, but usually no more so or differently than e.g. Elisha; a man of God but not as one who claimed to be God (at least during his life). But both Lewis and McDowell assert that whatever Jesus' claims were, if they were true he was God.
McDowell in particular seems to work from the idea that the twentieth-century American evangelical Christian interpretation of the gospels is the clear and only possible reading. For instance:
And, more than that, He was a demon, because He told others to trust Him for their eternal destiny. If He could not back up His claims and He knew it, then He was unspeakably evil.
The only way this argument can make any sense is if one is working from an orthodox evangelical view--that there is a God, that humanity as a whole has fallen away from God to the point of being in jeopardy of eternal damnation, that the only chance of reprieve from that fate is putting personal faith in a human incarnation of God, that Jesus claimed to be that incarnation, and so on--except that Jesus wasn't really God, so we're all damned anyway. Even then it's not clear how it's unspeakably evil to lie about that unless somehow all those people are damned because they believed Jesus and otherwise might have been saved.
In any event such an evangelical reading is not the only available understanding of what Jesus said according to the gospels. There is scholarly agreement that not all that is present in the gospels reflects what Jesus actually said. Some scholars have asserted that Jesus never actually existed, though this an uncommon view, while others have argued that the Jesus of history cannot be untangled from the mythical additions that make up the Christ of faith. Many scholars today do believe that the Jesus of history can to some degree be approached through careful examination of the Bible and other ancient texts--but the picture they uncover tends not to match the orthodox view very closely.
What all these alternative readings are is not important here--most readers will no doubt be familiar with several--what is important is that they exist and are at least as well supported as the orthodox reading. It is therefore not reasonable to talk in narrow terms about "Jesus claims to be God" or in broad terms about "the sort of things Jesus said" as if they were black and white alternatives, to be either entirely accepted as true or entirely rejected as false. A perfectly valid and supportable response to "Jesus claimed to be God" is "No, he didn't."
Liar or Lunatic?
The other flaw in the "trilemma" argument is that even if one concedes the first point for the sake of argument, and stipulates that Jesus did claim to be God, in incarnate form generally consistent with orthodox interpretation, the extremes of "lunatic" or "fiend" are not justified as the sole alternatives. In particular, it is still quite possible to consider Jesus a sound moral teacher even if one doesn't accept the claim of divinity.
On any view it must be recalled that there are many claims and sayings attributed to Jesus. Even with the stipulation of relative orthodoxy there are inevitably matters of interpretation. In any case we can say this: if Jesus said these things, then they were either completely and literally true, or they were not. If they were not true, then either he knew this, and was saying something he knew not to be literally and completely true, or he didn't know it, and taught them thinking them to be true. In considering specific claims, we should remember that many of the things he taught (and which are likely to be those to which a skeptical defender of Jesus as moral teacher is referring) are not directly related to claims about his divinity.
Some of Jesus' more famous moral statements are not stated of his own authority, but are simply restatements of the existing Law of Judaism as understood in his time. When asked to name the most important commandment he cites Deuteronomy and Leviticus:
One of the teachers of the law came and heard them debating. Noticing that Jesus had given them a good answer, he asked him, "Of all the commandments, which is the most important?" "The most important one," answered Jesus, "is this: 'Hear, O Israel, the Lord is one. Love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength' [Deut6:4,5] The second is this: 'Love your neighbor as yourself' [Lev19:18b] There is no commandment greater than these." "Well said, teacher," the man replied. "You are right in saying that God is one and there is no other but him. To love him with all your heart, with all your understanding and with all your strength, and to love your neighbor as yourself is more important than all burnt offerings and sacrifices."
Here [Mark 12:28-34, NIV], Jesus is in agreement with the teacher of the law on interpretation of Jewish scripture. Matthew's version at 22:34-40 is terser and more adversarial (and more often quoted) but retains the notion that Jesus correctly answers his questioner, while Luke 10:25-28 turns Jesus into the questioner, but still retains the agreement. And yet, "Love God, and your neighbor as yourself" is often cited as the heart of the Christian moral message. The Golden Rule [Mt7:12a, Lk6:31] is also in this category; compare both of these with Hillel's similar formulation, "What you don't like, don't do to others; that is the whole Law; the rest is commentary; go and learn!" . For these citations we can probably assume that if Jesus said them, then he believed them to be true, but in any event these teachings are in accord with those attributed to other moral teachers (Hillel), and so one would be justified in lauding Jesus as an equally great moral teacher (as many people today attribute "love thy neighbor" and "do unto others" to Jesus). He may have had other problems, but as far as these moral teachings, we may consider him sound regardless.
Others of his teachings are more specific to himself; ones cited in appealing to Jesus as moralist might include "love your enemies" [Mt5:44, Lk6:27] or this [Mt 5:39-42; cf Lk6:29ff]:
But I tell you, 'Do not resist an evil person. If someone strikes you on the right cheek, turn to him the other also. And if someone wants to sue you for your tunic, let him have your cloak as well. If someone forces you to go one mile, go with him two miles. Give to the one who asks of you, and do not turn away from the one who wants to borrow from you.'
These are less universal, but many people have argued that they are morally sound ideas--here again such sayings can be judged independently of other opinions concerning Jesus.
It should be obvious that if one sees Jesus as God or inspired, then these teachings may be taken on authority; however, even if one doesn't so see him one can still take them on their own merit. McDowell cites Hort as saying that Jesus' "words were so completely parts and utterances of Himself, that they had no meaning as abstract statements of truth." This is flowery but untrue, except again in the sense that someone who does not think Jesus was God Incarnate is not likely to hold him in the same esteem as one who does. This is supported by McDowell's citation of Kenneth Scott Latourette: "It is not His teachings which make Jesus so remarkable, although these would be enough to give Him distinction." It should go without saying that non-Christians attributing "distinction" to Jesus because of his teachings do not view him as being as "remarkable" as do Christians.
Although these things should go without saying, should be obvious, they apparently need to be stated in the face of McDowell's black-or-white view.
So Jesus' purely moral teachings can stand on their own, regardless of whatever else he may or may not have claimed. But what of teachings specifically concerning himself, or relying on his own authority? In these instances Jesus' own state of mind may be more significant.
If, when Jesus made his claims, he knew they weren't completely and literally true, was he lying? That's one possibility, but scarcely the only one. People often speak poetically or metaphorically; Jesus more so than most. In John 10:7,9 we see:
Therefore Jesus said again, "I tell you the truth. I am the gate for the sheep. ... I am the gate; whoever enters through me will be saved. He will come in and go out, and find pasture. [NIV]
Now by most understandings Jesus did not mean here that he was indeed a physical gate--it's a metaphor (though those listening seem not to understand it: Jesus often mystifies even his disciples as to what he really means). Indeed, almost all of Jesus' sayings appear to be parables, similes, metaphors, or otherwise indirect. This is most pronounced in the synoptics; the style of John is quite different, but still uses symbolic language. It is quite reasonable, then, to take statements sometimes read as implying deity as also being metaphoric, at least provisionally. Some such statements, such as "I and the Father are one" [Jn10:30] make perfect sense interpreted as ."..are united in purpose," while they strain the language in a trinitarian interpretation as ."..are separate persons of a single God."
Given that Jesus spoke in metaphor constantly, indeed in rather cryptic metaphor sometimes, it seems that for no particular claim can it be conclusively ruled as intended literally rather than symbolically. A metaphorical claim is not literally true but one who speaks metaphorically is no liar (unless the "correct" metaphorical interpretation is itself misleading, but that's much harder to discern).
Another, separate, possibility is that of the "noble lie." Jesus may have felt that his teachings on behavior were so important as to validate falsely claiming special authority from (or at an extreme, as) God in order to persuade people to follow them. There is historical precedent for the idea that "the people" need the backing of supernatural authority to behave morally. Jesus could have believed in all sincerity that following his teachings would lead people into the Kingdom of God and/or eternal life, and said what he thought necessary to get people to follow him. In doing so, to the extent that such a lie was against those teachings, he may have thought he was forfeiting his own eternal security. Greater love hath no man... [While this last detail wanders quite far down a specific path of speculation, it makes at least as much sense as McDowell's argument that it would be "unspeakably evil" to lie about promising salvation]. On this view Jesus would have been a liar, but nobly motivated, and no demon.
This doesn't by any means exhaust the possibilities, but provides some credible alternatives to McDowell's demonic liar.
Of course, that idea is not completely ruled out. The reasoning behind Lewis's "Devil of Hell" is not clear, but we certainly have evidence of religious leaders--some of whose movements have eventually become quite successful--who are generally considered to have been charlatans. McDowell cites a couple of character references for Jesus: from J.S. Mill who favors his moral teachings as we find them in the gospels (see above), William Lecky who comments on the figure of Christ as presented by Christianity as a favorable archetype (the passage doesn't comment on Jesus qua historical figure), and Philip Schaff who conflates the Christ of faith with the Jesus of history as if they must necessarily be identical. But this is mistaken--they need not be.
If Jesus was not telling the literal truth, then (barring a broader conspiracy) he fooled (intentionally or unintentionally) those around him, and the traditions which became the gospels and the church were based on the belief that he did speak the literal truth, and they present him in that light. On this view, the Christ of faith may effectively be a fiction--if not a conscious one.
If, when Jesus made his claims, they were false but he believed them to be true, was he insane? If, as we have stipulated in this section, his claims include being God in some sense, then this would probably be considered a delusion. To what degree it was pathological would depend on just exactly what he understood by "being God." If he understood something akin to what is believed by the Christian faith, then it would be a quite major delusion. If he believed he was the prophesied Messiah as expected by the Jews of his time, then he might have been honestly mistaken. There are many other possibilities in between, especially since his followers may not have understood things in the same way as he did (remember that his followers often didn't understand what he was talking about). His followers would have passed on their own understanding of Jesus' claims, and so on by word of mouth until they were set down in the gospels.
McDowell produces some more citations from "authorities" (Lewis, Napoleon(!), Channing, and Schaff) asserting in effect that one who falsely believed himself the Christ of faith would have to be such a megalomaniac that he couldn't have taught as the Christ of faith is said to have. Of these Schaff's comments, from The Person of Christ published by the American Tract Society, perhaps epitomize this briefly:
Is such an intellect--clear as the sky, bracing as the mountain air, sharp and penetrating as a sword, thoroughly healthy and vigorous, always ready and always self-possessed--liable to a radical and most serious delusion concerning His own character and mission? Preposterous imagination!
This is essentially circular: it's effectively an article of faith that Jesus Christ was the ideal man, therefore that his intellect was clear, bracing, etc.--this is not directly discerned in an unambiguous way from the actual words of Jesus as we have them. Another way of viewing this is that if Jesus was deluded about his status, then he was not the Christ of faith.
But could a historical Jesus who was in fact deluded have impressed people as he did and have given rise to the tradition that became the mythic Christ? Lewis says he would be "on a level with the man who says he is a poached egg." Surely nobody would have taken such a man seriously? And could a raving lunatic have taught the sound moral teachings Jesus did?
To the first question, one answer is that not all that many people did take Jesus seriously in his lifetime; the movement that became Christianity came after his death, and arose chiefly among people who'd never even seen or heard Jesus in person. As for those who did hear him, his appeal was largely with the lower elements in society; the religious establishment and teachers were not on the whole impressed with his wondrously clear and bracing intellect. For instance, in John 10:19-21 we see:
At these words the Jews were again divided. Many of them said, "He is demon-possessed and raving mad. Why listen to him? But others said, "These are not the sayings of a man possessed by a demon. Can a demon open the eyes of the blind?" [NIV]
So at least some people at the time apparently felt Jesus was "raving mad." In more recent times we know of cases of cults started by people broadly considered mentally unstable--Manson, Jones, Koresh -- these familiar cases are well-known because of tragic outcomes, but they surely illustrate the capacity of some people for following charismatic but possibly deluded leaders. For cults which spread beyond the leader's immediate following, we can expect the word of mouth to emphasize the leaders' charisma, wisdom, and "sharp and penetrating intellect," rather than presenting that leader as psychotic. A cult which lasted a generation beyond the death of its leader before producing written accounts of that leader would be expected to reflect that emphasis in those accounts.
More generally, though, there is the question of the nature of mental illness and delusion. There is an implication in the trilemma/LLL argument that someone with such a delusion would be a) incapable of sound rational thought on moral issues, and b) obviously raving mad, and thus incapable of influencing people. This is not the case. There are many kinds of delusional mental illness, with varying effects. Some of these occur sporadically rather than constantly--the term lunacy itself refers to a form of insanity intermixed with periods of clear thinking (the name comes from association with the cycle of the moon). The mania phase of bipolar disorder is an instance in which delusion is not necessarily constant. Paranoia is a different case in which the delusion is compartmentalized, with the delusion itself being quite rationalized, and the remaining reasoning functions largely unaffected. The Encyclopedia Britannica  says paranoia is:
...a delusional psychosis, in which the delusions develop slowly into a complex, intricate and logically elaborated system, without hallucination and without general personality disorganization. Sometimes the fixed delusional system, which may be grandiose, persecutory or erotic, is more or less encapsulated, thus leaving the personality relatively intact. Though a great many patients with paranoia have to be hospitalized, some do not, and among these an occasional one succeeds in building up a following who believe him to be a genius or inspired. ... Unlike the grandiose delusions in mania and in schizophrenia, paranoid grandiosity tends to be well-organized, relatively stable and persistent. The complexity of delusional conviction varies from rather simple beliefs in one's alleged talents, attractiveness or inspiration to highly complex, systematized beliefs that one is a great prophet, author, poet, inventor or scientist.
So not only can we make a case that a relatively obvious nut might found a religion and still be remembered as wise, but a paranoiac or a sufferer of various other forms of delusion might be quite convincing on the subject of their delusion, while furthermore being quite capable of sound reasoning on e.g. moral issues. Once again, the story would have been passed on by people who believed what the leader said.
Who you decide Jesus Christ is must not be an idle intellectual exercise. You cannot put Him on the shelf as a great moral teacher. That is not a valid option. He is either a liar, a lunatic, or the Lord. You must make a choice.
As has been shown above, it is not the case that there are three and only three precisely-defined choices to be made here, but rather a vast continuum of possibilities. We don't know with any level of confidence precisely what Jesus as a historical figure claimed for himself, and in any event if whatever he claimed was false there are a great diversity of possibilities, which include liar and lunatic (which McDowell has not successfully ruled out) but which also include many other options which do allow Jesus to be considered a sage or moral teacher and no more.
The trilemma argument does not support any particular opinion one way or another concerning Jesus. If one already believes that Jesus was the Christ of the Christian faith and hence Lord, then naturally one is disinclined to believe that he was anything else, and may favor the idea that other options are untenable. This argument, however, provides no logical support for one who doesn't already believe to choose the "Lord" option out of all the others.
One way to judge the logical quality of an argument like this is to consider a similar argument about someone one feels differently about, for instance Muhammad: liar, lunatic, or prophet of God? One can find muslims making essentially similar arguments to those cited by McDowell about his sterling honesty and clarity of mind. The same again for Baha'ullah and other religious figures.
The evidence is clearly in favor of Jesus as Lord. However, some people reject the clear evidence because of moral implications involved. There needs to be a moral honesty in the above consideration of Jesus as either a liar, lunatic, or Lord and God.
The "evidence" McDowell brings into court dissolves readily into flimsy shreds upon the slightest cross-examination. He therefore falls back upon the technique of "poisoning the well"--a variation of the ad hominem fallacy in which any opposing argument is dismissed out of hand because of the imputed motives of the opponent. Here he asserts that anybody questioning this "clear evidence" is doing so not because the evidence itself is flimsy or nonexistent, but because of "moral implications involved" in accepting the evidence. Just what those implications might be are left unstated here, but the implied imagery of all sorts of debauchery and idolatry that would have to be given up if one became a Christian can be assumed (one can assume it in part because St. Paul writes about some of it in Romans 1 --McDowell didn't invent this "argument" either). In point of fact Christians on the whole are no more (nor less) moral than non-Christians, even by Christian standards, and Christianity doesn't call for a more stringent moral code than most alternatives. Furthermore, many Christians will readily admit not only this latter fact but also that the evidence McDowell presents (in general, but specifically the trilemma argument) is not in itself persuasive. There needs to be an intellectual honesty in consideration of the "liar, lunatic, or Lord" argument.
 Copi, Irving M., Introduction to Logic, fifth edition, New York: Macmillan, 1978, p. 255.
 Lewis, C.S. (Clive Staples), Mere Christianity, revised edition, New York, Macmillan/Collier, 1952, p. 55 ff.
 Craig, William Lane, Reasonable Faith: Christian Truth and Apologetics, revised edition, 1994, pp. 38-39.
 McDowell, Josh. Evidence That Demands a Verdict. revised edition, San Bernardino, Here's Life, 1979, p. 104.
 Ibid., p. 105.
 Talmud Babli, Sabbath 31a, cited in Kaufmann, Walter, The Faith of a Heretic, New York, Doubleday/Anchor, 1961, p. 212
 McDowell, p. 103.
 Ibid., pp. 105-6.
 Ibid., p. 106-7.
 Ibid., p. 107.