Key propositional terms from 2:16
"Even we Jewish believers [more so than Gentile believers] know that a person is not set right with God (justified) on the ground of their faithful observance of the law of Moses, but rather on the ground of the faithfulness of Jesus Christ (his atonement, ie., a person's right-standing in the sight of God depends on Christ's faithfulness not our own). Convinced that no person can gain God's approval by self-improvement, we believed in Jesus as the Messiah so that we might be set right with God, because no one can ever be set right with God on the ground of law-obedience."
dikaioutai (dikaiow). The verb "justified / set right with God / put in the right with God", appears in Galatians three times in 2:16, and once in 2:17, 3:8, 11, 24 and 5:4, while the adjective appears once in 3:11. Paul uses the present tense, indicating an ongoing state, while the passive voice is usually regarded as divine, ie., God does the justifying. The noun dikaiosunh takes the sense "justified", "right", "righteous", or "uprightness", Fitzmyer, "the state of being right with God", Bruce, "covenant compliant", Dumbrell.
The action "to justify" is usually understood in the terms of God regarding a person in the right with him and this on the basis of the faithfulness of Christ. This "recognition of covenant inclusion", Dumbrell, is sometimes expressed by commentators in forensic terms, "judged in the right with God", Dumbrell, "confer a righteous status on", Cranfield, or in more relational terms, "count /treat as right / righteous", Barrett, "accepted as right / righteous", Cassirer. Along with the "declared right" approach, there are those who argue that the verb means "made right". Those who support the "made right" position do not necessarily agree with the Catholic "ethical" view of making right, nor a Protestant notion of perfectionism, but rather see it in the terms of a person being included in God's program of setting all things right, so "rectified", Martyn, "made sinless in the sight of God", Junkins, in the terms of establishing a right relationship with God. Of course, in the end, what God declares so, is so. If God declares us right before him, even just regards us right before him, then we are right, holy, perfect in his sight, and eternally so (as long as we hide behind Jesus!!!). We can say then that justification is an action stemming from God's grace (his promise-keeping mercy facilitated in the sacrifice of Christ) whereby a person is "set right / judged right with God".
It is clear that both Paul and his opponents equally accept the gospel formula that a person is justified on the basis of Christ's faithfulness, appropriated through faith, apart from works of the law. The point of contention seems to be over what we might call the coverage of the doctrine. It is likely that the judaizers limit the coverage to forgiveness, possibly even just forgiveness at conversion, whereas Paul sees justification in much wider terms, probably best described as "the fullness of new life in Christ" (note the parallel use of "justified" and "live to God" in Gal.2:15-21). For the judaizers, this new life is accessed by obedience to the law, whereas for Paul, the new life is a natural consequence of being right with God. "Life" is a product of Christ's faithfulness appropriated through faith and not law-obedience.
The judaizers, obviously influenced by Second Temple Judaism, had developed a dichotomy between justification and sanctification - justified by grace through faith; sanctified by works / obedience. For Paul, sanctification is a product of justification, a state of holiness which, in the renewing power of the indwelling Spirit, a believer strives to apply in their daily life - godliness is not achieved by obedience, but by walking with the Spirit. Whiteley, in The Theology of St. Paul, nicely illustrates our experience of sanctification. It is "just as a man who has come out of the cold into a warm room is subject both to the cold which has numbed his hands and to the heat which is thawing them out."
So, justification is the relational element of God's setting all things right. Christ is even now seated at the right hand of the Ancient of Days and we are seated with him. The kingdom of God, with all its blessings, is upon us, the day has come for which humanity, and even nature, yearned. Our participation in this new life, yesterday, today and tomorrow, is inclusive of our justification and is not an extra appropriated by a faithful attention to the law.
ex + Gen. "on the ground of" - from. In v16a Paul uses two prepositions to express a similar idea (in this context they are interchangeable): ek with "works of the law", and dia with "faith". The NIV translates both to express means, "by". In v16b he uses ek with both "works" and "faith." The preposition can be used to express, source, separation, means, and cause / basis. Given that Paul uses dia + gen., expressing means, along with ek, it seems that he is using ek to express a means consisting of a source. A possible translation for such a sense is "on the ground of." So, a person is set right before God on the basis of / on the ground of faith / faithfulness of Christ appropriated through faith". Bruce has "through", instrumental, but note how Berkeley has "due to", causal. "Even we (Jews) have believed in Christ Jesus in order that we might be justified on the basis of the faithfulness of Christ", 2:16, Longenecker; "righteousness would have come from keeping the law", 3:21, Fung; "that the source of our justification might be the faith of Christ", 2:16, Martyn.
ergwn nomou "observing the law / doing what the law of Moses commands" - works of law. The meaning of this phrase has prompted endless debate, particularly with respect to The New Perspective on Paul. It probably serves as a descriptor of nomism/pietism, the idea that performance will progress the Christian life. Most likely the law of Moses is in mind. Paul's treatment of the law is a matter of constant debate in that he both affirms the doing of the law, but also depreciates it. Clearly, the intended purpose of obedience is what matters. There is nothing wrong with using the law as a guide to Christian living, but to use the law to facilitate God's grace is to place ourselves under the curse of the law. Only perfect obedience enables us to participate in God's plan to set all things right. Even Paul, who, when it came to the legalistic observance of the law, was "blameless", knew that he was not justified "by doing what the law commands", Moffatt.
dia thV pistewV autou "the the faith / faithfulness of him (Jesus Christ)" The noun "faith" when used with the genitive "him / Jesus Christ" is usually understood as "a committal of oneself to Christ on the basis of the acceptance of the message concerning him", Burton, ie., the genitive is treated as verbal, objective. This classification is doctrinally foundational: "Faith in Christ is the sole and sufficient means of justification", Fung.
The trouble is that pistiV in Gk. at the time, and in the Septuagint (the Gk. OT), didn't mean "faith / trust" directed toward someone, but rather "reliability / fidelity / firmness / faithfulness / trustworthiness." This sense seems also to dominate the NT, including Paul's letters. Although not widely accepted, it is more than likely that the "faith" here is actually generated by Christ (subjective genitive; see Wallace 115 who argues that the vast majority of personal or impersonal genitives with pistiV are subjective), or belongs to Christ (possessive), or generally describes Christ's character (adjectival, descriptive). So, our right-standing before God rests on Christ's "faith / faithfulness" to the will of God expressed in his obedience to the way of the cross on our behalf; "Christ's trustful obedience to God in the giving up of his own life for us", Martyn, (cf., See Galatians 2:16, and also 2:20, "I live in faith, that is to say, in the faith of the Son of God", Martyn).
Most commentators remain unconvinced and opt for an objective genitive. Larkin notes that when pistiV is introduced by en w|/, "in whom", then Christ is obviously the object of the faith, ie., an objective genitive. In Ephesians 3:12 Larkin argues that the en w|/ introducing the verse is also assumed for pistewV autou, as NIV, "In him and through faith in him." Merkle p98 addresses the issue with respect to Ephesians 3:12 and concludes that "though the objective genitive is slightly more likely, the subjective genitive cannot be ruled out."
None-the-less, it seems likely that the genitive "of him" is subjective, or possessive, "through the faith / faithfulness of him", rather than the more widely accepted objective genitive, "faith in him", where Christ is the object of the faith, as NIV etc. Christ's faithfulness, evident in the cross, rests of the Father's faithfulness to his promises, the appropriation of which (the promises of God worked out in the cross) is to we who (episteusamen) believe, cf., Rom.3:22, Gal.2:22 "A person is ... justified ...... by means of the faith / faithfulness of Christ Jesus."
Donald Robinson in Faith of Jesus Christ - a New Testament Debate, published in the Reformed Theological Review, #29, 1970, opts for a subjective genitive, translating pistiV as "firmness"; "Christ is the immovable rock established by the immutable God, upon which he invites men to take their stand without flinching." For the use of the genitive in Galatians, see Martyn and also Longenecker p87. For further reading see the doctoral dissertation by Richard Hays, The Faith of Jesus Christ: An Investigation of the Narrative Substructure of Galatians 3:1-4:11, published in the Society of Biblical Literature Sources for Biblical Study edition #56 edited by Bird, 1983, and republished as The Faith of Christ, Eerdmans, 2002.