Paul clarifies what he means when he states that the Law is fulfilled. Paul has a high view of the Law. He is a Jew. He already clarified that he did not mean the Law was abolished. Since all people have transgressed the Law, all people stood condemned. Now there is no condemnation for those who are in Christ rather than in the Law.
Paul refers to two different laws, a law of the Spirit of life in Christ and a law of sin and death. The law of the Spirit sets us free from the law of sin and death. Then, he describes two different types of people. There are those who live according to the flesh and those who live according to the Spirit. Those who set their minds on the flesh are hostile toward God. Those who set their minds on the Spirit have the Spirit of God dwelling in them. Notice the language, they live according to the Spirit because the Spirit of God already dwells in them. Without the Spirit, no one is able to subject himself to the Law of God.
The whole context, here, shows the difference between those who are under the Law and those who are free from the Law—between those who are trying to fulfill the Law and those in whom the Law has been fulfilled.
Those who are of the flesh, here, are religious people who try to live moralistic (not to be confused with moral) lives and try to cause others to also live moralistic lives. God is not their God, their religious system of regulations is. In Paul’s day, it was Jews who saw the Law as a means to righteousness rather than recognizing that the Law condemned them because of their transgressions. In my context, it could be the Christian who holds political republican ideals as if they are the Christian worldview and condemns those who disagree or the prohibitionist who means well but condemns others for having a beer and himself willfully falls into the sins of gluttony and judgmentalism—doing things that are much worse for his body and soul. These are not the only examples, for there are many worldly people. Those who are according to the flesh set their minds on the flesh. People who are merely religious set their minds on the religion of the flesh.
Those who are of the Spirit live differently. By the Spirit, we are set free from the law of flesh—no longer having to live up to a standard in order to become righteous or maintain some sort of religiosity as a pretense. They have their minds set on the Spirit instead of bad religion, and the result is life and peace—the opposite of death and judgmentalism.
What does it mean that the Law is fulfilled in us? It means that the requirement of the Law is fulfilled in us. What is the requirement of the Law? Since all people have transgressed God’s Law, the requirement is death. No one can fulfill the Law by keeping it. We can only fulfill the Law by dying. Christ died as a substitutionary atonement for His people. That is how He fulfilled the Law. We die to ourselves (to the fleshly religiosity both ‘religious’ and ‘irreligious’ people love so much) in order to live in Christ according to the Spirit. That is how the Law is fulfilled in us. I would not say that we fulfill the Law. That is prideful and I know my works cannot do such a thing. That is why we say that the Law is fulfilled by Christ and fulfilled in those who are in Christ. His work is sufficient and efficacious for all of His people.
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