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Romans 2:25,26 reads,
25 For indeed circumcision is of value, if you practice the Law; but if you are a transgressor of the Law, your circumcision has become uncircumcision. 26 If therefore the uncircumcised man keeps the requirements of the Law, will not his uncircumcision be regarded as circumcision?
Paul had just accused the Jews of dishonoring God by violating the Law (2:23). In the next chapter he makes it very clear that "all have sinned," Jew and Greek alike. For this reason, every Jew's circumcision was to no avail and had no value in the sight of God. The reason is that circumcision was (and still is) an Old Covenant vow of obedience, when done as a religious ritual. It is an obligation to be perfectly obedient as a condition for justification. But no one was able to fulfill that vow. Hence, circumcision was made uncircumcision through sin.
In other words, they have all broken their vows of obedience, rendering their circumcision null and void.
On the other hand, if an uncircumcised man were able to keep the Law, "will not his uncircumcision be regarded as circumcision?" Yes, of course. Paul is not suggesting that any man is actually able to keep the whole Law, for he says in 3:19 that the whole world has come "under the Law," that is, they have "become accountable to God."
Being "under the Law" is NOT something that man does by making a vow of obedience (as Christians normally define the term). Being "under the Law" is the condition of the sinner who has violated the Law, putting him under arrest and held accountable to the Law and its penalty. No man is under the Law until he has sinned, for the Law is made for lawbreakers, not for the righteous (1 Tim. 1:9). The Law has no interest in us until we violate it.
In his discussion with the Jew, Paul makes it clear that physical circumcision is not what really sets a man apart for divine service. God is looking for those with pure hearts, whether circumcised or not. When Jesus Christ died to fulfill the first goat of Lev. 16,15-20, His blood was sprinkled on the mercy seat in Heaven (Heb. 9:11, 12). This act "atoned" for sin, that is, it covered (Heb. kaphar) our sin, giving us a positional righteousness. It was as if we had never sinned.
Thus, even an uncircumcised man can have his sin covered, and the Law considers him to be perfectly righteous, for God calls what is not as though it were (Rom. 4:17). This imputation of righteousness, prophesied by the first goat of Leviticus 16, is explained more fully in Romans 4, but it is the basis also of 2:26.
The Jew who claims righteousness on account of physical circumcision and his attempt to fulfill his vow of obedience to the Law--such a man is always proven to be a sinner under arrest being prosecuted by the Law as a lawbreaker.
The non-Jew who has faith in Jesus Christ's work on the cross, by which the prophecy of the first goat was fulfilled, can claim righteousness before the Law, because his sin has been properly covered. This is done, not by putting away the Law, but by actually following its precept found in Lev. 16:15-20. The Law showed us the way to obtain Grace. Though it prophesied in terms of a goat, it truly spoke of faith in Jesus Christ.
Hence, the non-Jew's "uncircumcision" is made circumcision by faith in Jesus Christ, who fulfilled the Law of the first goat.
27 And will not he who is physically uncircumcised, if he keeps the Law, will he not judge you who though having the letter of the Law and circumcision are a transgressor of the Law?
The Jews prided themselves on being the ones divinely chosen to judge (rule) the world. But Paul tells the Corinthian church in 1 Cor. 6:2,
2 Or do you not know that the saints will judge the world? And if the world is judged by YOU, are you not competent to constitute the smallest law courts?
Likewise, the book of Revelation says nothing about the Jews ruling the world, but speaks only of those who follow Jesus Christ. Rev. 20:6 says that "they will be priests of God and of Christ and will reign with Him for a thousand years." No Jew who has rejected Jesus as the Christ will qualify to reign with Him, nor will this priesthood be Levitical, for Jesus is the High Priest of an entirely new order (Melchizedek).
God has called judges from virtually every tribe, tongue, and nation, as we read in Rev. 5:9, 10,
9 And they sang a new song, saying, "Worthy art Thou to take the book and to break its seals, for Thou wast slain, and didst purchase for God with Thy blood men from every tribe and tongue and people and nation. 10 And Thou hast made them to be a kingdom and priests to our God; and they will reign upon the earth."
And so Paul concludes in Romans 2:27 that non-Jews will judge Jews, for such a calling is not based upon circumcision or upon flesh of any kind, but is determined by the heart and by one's relationship with Jesus Christ.
28 For he is NOT a Jew who is one outwardly; neither is circumcision that which is outward in the flesh. 29 But he is a Jew who is one inwardly; and circumcision is that which is of the heart, by the Spirit, not by the letter; and his praise is not from men, but from God.
Paul approaches this from both the negative and the positive. Those claiming Jewishness by their fleshly circumcision are NOT JEWS in the sight of God. Those who possess the heart circumcision, however are of the tribe of Judah in God's sight. "His praise if not from men, but from God." Here Paul employs a play on words. The name Judah means "praise." Thus, Paul says, his Judah-hood (that is, his status in the tribe of Judah) is not from men, but from God.
In other words, what men call a Jew (or Judean, or Judahite) is not the proper definition of the term. It is man's definition, not God's. From God's perspective, any man who revolts against the King of Judah has forfeited his position in the tribe. He is cut off from among his people. But any man who accepts the King of Judah has joined the tribe of Judah.
Hence, the Church is the real tribe of Judah, from God's perspective.
This is also evident from the law of sacrifice in Lev. 17. It was lawful to sacrifice an animal outside the place where He has put His name. However, the man had to bring the blood of that sacrifice "to the doorway of the tent of meeting" (17:4) to present it to Yahweh. If he failed to do this, he would be "cut off from among his people."
Jesus Christ is the true Sacrifice for sin. He was crucified outside the camp (Heb. 13:13), where the sacrifice was made. That much was lawful, but only those who present His blood to Yahweh as a covering for their sin will be justified. Any Jew who rejects His sacrifice, who refuses to present His blood to Yahweh, is "cut off from among his people." In other words, he is no longer of the tribe of Judah.
This is the penalty of the Law. Such a law-breaker cannot claim genealogy as a right to remain within the tribe. The Law always trumps genealogy, and for this reason God always brought judgment upon both Israel and Judah. Israel was cast out first in 721 B.C.
Judah was not cast out as a tribe, because the tribe continued to function through Jesus and His followers; but many genealogical Jews were cut off and no longer were considered to be Jews in the eyes of God. And many others were grafted into the downsized tribe of Judah, not being "natural" Judeans, but full citizens of Judah nonetheless.