Elmer L. Fairbank wrote:
"In the world but not of it" or something of it's ilk.   What's the 
source of the saying?

According to Nibley--

That is, when I find myself called upon to stand up and be counted, to 
declare myself on one side or the other, which do I preferógin or rum, 
cigarettes or cigars, tea or coffee, heroin or LSD, the Red Rose or the 
White, Shiz or Coriantumr, wicked Nephites or wicked Lamanites, Whigs or 
Tories, Catholic or Protestant, Republican or Democrat, black power or 
white power, land pirates or sea pirates, commissars or corporations, 
capitalism or communism? The devilish neatness and simplicity of the 
thing is the easy illusion that I am choosing between good and evil, 
when in reality two or more evils by their rivalry distract my attention 
from the real issue. The oldest trick in the book for those who wish to 
perpetrate a great crime unnoticed is to set up a diversion, such as a 
fight in the street or a cry of fire in the hall, that sends everyone 
rushing to the spot while the criminal as an inconspicuous and highly 
respectable citizen quietly walks off with the loot.

It can be shown that in each of the choices just named, one of the pair 
may well be preferable to the other, but that is not the question. There 
is no point in arguing which other system comes closest to the law of 
consecration, since I excluded all other systems when I opted for the 
real thing. The relative merits of various economies is a problem for 
the gentiles to worry about, a devil's dilemma that does not concern me 
in the least. For it so happens that I have presently covenanted and 
promised to observe most strictly certain instructions set forth with 
great clarity and simplicity in the Doctrine and Covenants. These are 
designated as the law of consecration, which are absolutely essential 
for the building up of the kingdom on earth and the ultimate 
establishment of Zion. "Behold, this is the preparation wherewith I 
prepare you, and the foundation and the ensample which I give unto you, 
whereby you may accomplish the commandments which are given you; that 
through my providence, notwithstanding the tribulation which shall 
descend upon you, that the church may stand independent above all other 
creatures beneath the celestial world" (D&C 78:13-14). It is all there, 
this law of consecration, by which alone the Saints can implement God's 
plans for Zion in spite of the persecution it will bring on them; this 
is the foundation on which they must build (see D&C 48:6). The 
alternative is to be dependent on baser things, for "Zion cannot be 
built up unless it is by the principles of the law of the celestial 
kingdom; otherwise I cannot receive her unto myself" (D&C 105:5).

But should I ask for tribulation? I live in the real world, don't I? 
Yes, and I have been commanded to "come out of her,. . . that ye be not 
partakers of her sins" (Revelation 18:4). It is not given "unto you that 
ye shall live after the manner of the world" (D&C 95:13). Well, then, 
you must be "in the world but not of the world." That happens to be a 
convenient para-scripture (we have quite a few of them today), invented 
by a third-century Sophist (Diognetos), to the great satisfaction of the 
church members, who were rapidly becoming very worldly. The passage as 
it appears in the scriptures says quite the opposite: "For [whatsoever] 
that is in the world. . . is not of the Father, but is of the world" (1 
John 2:16). The Lord has repeatedly commanded and forced his people to 
flee out of the world into the wilderness, quite literally; there is 
only one way to avoid becoming involved in the neighborhood brawls, and 
that is to move out of the neighborhood. There is nothing in the 
Constitution that forbids me doing certain things I have covenanted and 
promised to do; if the neighbors don't like it, they have no legal 
grounds against me, but there are ways of getting me to move; "the 
tribulation. . . shall descend upon you," said the Lord, but do things 
my way and "my providence" will see you through (D&C 78:14). This 
inescapable conflict is part of our human heritage, as we learn from 
dramatic passages of scripture.

(Hugh Nibley, Approaching Zion, edited by Don E. Norton [Salt Lake City 
and Provo: Deseret Book Co., Foundation for Ancient Research and Mormon 
Studies, 1989], 163 - 164.)

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