The best treatment of this verse (and the other passages in the bible that speak the same way) is Siegbert Becker's, The Christological Flesh-Spirit Antithesis. In his opening words, he writes:
The New Testament usage of “flesh” and “spirit” as designations for
the old man and the new man in the believing child of God is familiar
to all students of the New Testament. Paul says, for example, that the
flesh lusts against the spirit and the spirit against the flesh (Ga
5:17). Commentators some-times debate whether the word “spirit” in
such passages should be spelled with a lower or upper case letter. In
the final analysis it makes little difference how that question is
answered. Any striving against the flesh that is carried on by the
“spirit,” or the new man, is done only in the strength supplied by the
Holy Spirit and under his guidance and direction.
Not nearly so well known and not as easily understood are those
passages in the New Testament in which the flesh-spirit antithesis is
used in reference to the Lord Jesus. Obviously when the New Testament
speaks of the flesh of Christ it cannot have in mind the depraved side
of man’s nature. To ascribe such a corrupt nature to the Son of God
would be a blasphemous denial of what the Scriptures have to say about
the sinlessness of Christ.
It is evident therefore that the use of the flesh-spirit antithesis in
Christological passages must be approached from a radically different
point of view. In these passages the spelling of the word “spirit”
will change the meaning of the text significantly.
The question therefore arises, “How is this flesh-spirit antithesis in
Christology to be understood?”
There are three passages in the New Testament in which we are
confronted by this contrast between flesh and spirit in Christ. These
passages, in the AV, are the following:
1 Pe 3:18c-19: (Christ was) put to death in the flesh, but quickened
by the Spirit, by which also he went and preached to the spirits in
prison.
1 Ti 3:16b: God was manifest in the flesh, justified in the Spirit.
Ro 1:3b-4: (Jesus Christ) was made of the seed of David according to
the flesh, and declared to be the Son of God with power, according to
the spirit of holiness, by the resurrection from the dead.
His premise is worthy of consideration. We are used to this common theme in the bible (especially in Pauline thought):
- Flesh = sinful nature
- Spirit = New nature (or Holy Spirit guiding new nature)
What do we do when this same dichotomy is applied to Jesus? He does not have a sinful nature. So how can we make sense of this? Becker's thesis is that this "antithesis" is, instead, this contrast:
- Jesus' State of humiliation/exinanition
- Jesus' State of Exaltation
Concerning 1 Tim. 3:16, he writes:
1 Timothy 3:16
This interpretation of the flesh - spirit antithesis also fits very
well in the First Timothy passage, where we have the same contrast.
There (3:16) Paul says, in the AV rendering, that “God was manifest in
the flesh and justified in the Spirit.” ...
In this passage, too, as in 1 Peter 3:18, the Greek phrases are
identical in form. However, instead of the simple dative, we have here
a prepositional phrase with the noun in the dative, namely, en sarki
and en pneumati. It would appear, therefore, that the two phrases
ought to be translated in the same way in English, if that would yield
a meaningful rendering. Yet about half of the versions cited translate
the two grammatically identical phrases differently. However, if en
sarki is translated “in the flesh,” en pneumati ought to be translated
“in the spirit,” especially because this is actually more meaningful
than “by the Spirit.”
Once again the article is missing in both phrases. Among the versions
cited the only one which indicates this fact in English is Beck’s AAT,
although Goodspeed clearly takes note of it in the first phrase.
Here, too, we are faced with the problem of whether the word “spirit”
should be capitalized. We might ask what is meant if we say that he
was “justified in the Spirit.” This sort of language is found nowhere
else in the New Testament. The Bible does say that Jesus was led into
the wilderness en too pnemati (Lk 4:1). However, Matthew, in telling
the same story says that Jesus was led into the wilderness hypo tou
pneumatos (Mt 4:1). In Acts 17:31 en is clearly used to indicate the
intermediate agent. We may therefore conclude that both the NIV and
the AV translate correctly in Luke 4:1 when they say that Jesus was
led by the Spirit into the desert. It should be noted, however, that
in this passage pneumati has the article. There can be no doubt,
because of the article and the whole context, that the word is clearly
a designation for the Holy Ghost.
“Justified by the Spirit” might make sense. But there is no other
passage in Scripture that speaks in this way. Moreover, because of the
absence of the article and the antithesis between en sarki and en
pneumati, such an interpretation would seem to be fraught with
difficulties.
But if we understand the words sarx and pneuma here also as a
reference to the two states of Christ, everything once more becomes
clear. The word flesh is often used in the Scripture as a designation
for man and particularly for man in his weakness (cp. e.g. Isa 40:6).
Christ was manifest in flesh, that is, he appeared in this world as a
lowly, despised and weak human being. But he was justified in spirit,
that is, he was publicly vindicated by God as Lord and Christ (Ac
2:1,6) in that new glorified, spiritual state in which he appeared to
his disciples after his resurrection.
Every now and then I circle back to his paper and reread it. And every time I find it more cohesive and convincing. It's worth a read in its entirety.