All who sin apart from the law will also perish apart from the law, and all who sin under the law will be judge by the law. (NIV)
Basically what I'm asking is:
What does it mean to sin Apart from the law?
What does it mean to sin Under the law?
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In Romans 1:16, Paul says, "For I am not ashamed of the gospel, for it is the power of God for salvation to everyone who believes, to the Jew first and also to the Greek.” (Romans 1:16) This latter phrase is repeated in the immediate context of Rom 2:12 as well,
"There will be tribulation and distress for every human being who does evil, the Jew first and also the Greek, but glory and honor and peace for everyone who does good, the Jew first and also the Greek.” (Romans 2:9–10, ESV)
It's likely that, based on that context, verse 12 is referring to Gentiles as those who have sinned without (or apart from) the law, and Jews as those who have sinned under the Law.
Paul is referring to the universality of condemnation of sin of both Jews and gentiles. Condemnation for the Jews being one under the law and its demands, the gentiles be estranged or apart from the law and its demands. One question Paul answers in this verse is: How are gentiles who were "apart from the law" Judged? The answer to this is given in Romans 2:15.
Rom 2:15 who show the work of the Law written in their hearts, their conscience also bearing witness, and the thoughts between one another accusing or even excusing one another,
The law "written in their hearts" should not be confused with the law written on the hearts of believers promised by the New Covenant. Here Paul is referring to conscience of individuals and the general acceptance of evil and good of the gentile world.
Romans 2:12 is difficult to understand if one believes both Jews and gentiles were or are under the law. By "under the law", I mean those who would contend gentiles were obligated to fulfill the demands of law (or portions of) but did not due to ignorance. We must keep in mind that the Mosaic law was given to a specific people, the nation of Israel, and that gentile nations were completely outside of the commonwealth of Israel and its laws. Paul reminds the Ephesian Christians of this fact in Ephesians 2.
Eph 2:12 and that at that time you were without Christ, being aliens from the commonwealth of Israel, and strangers from the covenants of promise, having no hope, and without God in the world.
Summary: Prior to the cross of Christ only Jews were under the law. They were judged by its rigid demands. Gentiles were apart from the law yet judged by what Paul calls, Laws written in their hearts (Romans 2:15). In this way God holds the entire world accountable for their sins, and their is no partiality (Romans 3:6,3:19)
What is the meaning of Romans 2:12?
In context Paul is comparing two sets of two things. He contrasts the evil with the good and he contrasts the Jews with the Gentiles.
Romans 2:6-9 Who will render to every man according to his deeds:
To them who by patient continuance in well doing seek for glory and honour and immortality, eternal life: But unto them that are contentious, and do not obey the truth, but obey unrighteousness, indignation and wrath, Tribulation and anguish, upon every soul of man that doeth evil, of the Jew first, and also of the Gentile;
Paul shows that judgment for deeds is applied equally to the Jews (under the law) as well as the gentiles (apart from the law).
In chapter one Paul writes graphically about those who reject even the knowledge of God. In chapter two he is addressing those Jews who feel that they have special status and do not need to worry much because of their position.
Romans 2:25 For circumcision verily profiteth, if thou keep the law: but if thou be a breaker of the law, thy circumcision is made uncircumcision.
Paul shows specifically in verse twelve that there is no protection from the consequences of an evil heart by being a Jew.
Rom 2:12 For as many as have sinned without law shall also perish without law: and as many as have sinned in the law shall be judged by the law;
While not mentioned in detail here, the key for the Jew was the same for the gentile to have sins not counted by reason of faith.
Genesis 15:6 And he believed in the LORD; and he counted it to him for righteousness.
Romans 2:26 Therefore if the uncircumcision keep the righteousness of the law, shall not his uncircumcision be counted for circumcision?
Paul uses Romans chapter two to establish a foundational teaching that the difference between Jew and gentile disappears in Christ that is built upon elsewhere.
Ephesians 2:12-15 That at that time ye were without Christ, being aliens from the commonwealth of Israel, and strangers from the covenants of promise, having no hope, and without God in the world:
But now in Christ Jesus ye who sometimes were far off are made nigh by the blood of Christ. For he is our peace, who hath made both one, and hath broken down the middle wall of partition between us; Having abolished in his flesh the enmity, even the law of commandments contained in ordinances; for to make in himself of twain one new man, so making peace;
The law was a good gift to give the Jews what they needed until Christ came. Galatians 3:23-4 refers to it as a παιδαγωγὸς (a guardian of a minor or a tutor), and it ἐφρουρούμεθα (held us in custody) and was συγκεκλεισμένοι (imprisoning) us.
Now, if you don't have that guardian and are not in (protective) custody (that is, you are not a Jew or God-fearing gentile), then you'll also perish because of your sin in the same way (without ever having that guardian). That is to sin "apart from the law".
And if you do have that guardian and you still sin, then you'll be judged by that very guardian. That is to sin "under the law".
Both, then, lead to judgment. To go further than to answer your question, Paul goes on in Galatians 3:25 to explain that it is when you come of age and no longer need a παιδαγωγὸς that you are a child of God and heirs of the promise of Abraham (which came before the law, of course). And in chapter 4:
1 My point is this: heirs, as long as they are minors, are no better than slaves, though they are the owners of all the property; 2 but they remain under guardians and trustees until the date set by the father. 3 So with us; while we were minors, we were enslaved to the elemental spirits[a] of the world. 4 But when the fullness of time had come, God sent his Son, born of a woman, born under the law, 5 in order to redeem those who were under the law, so that we might receive adoption as children. 6 And because you are children, God has sent the Spirit of his Son into our hearts, crying, “Abba! Father!” 7 So you are no longer a slave but a child, and if a child then also an heir, through God.
I don't believe we should follow the law. Christ came to fulfill it and by following the law we give Satan power over us. We should rather live by the new commandment "Love one another as I have love you" - by doing this we will not break any law intentionally. When we fall to sin, grace is sufficient for all where we can repent of our sin. Living the new commandment will make us more of Christ and less of the flesh, giving us the power to resist temptation.