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Dispensationalism would say that the Church was a spiritual Kingdom operating in the Age of Grace, whereas there will be an earthly Jewish Kingdom in the Kingdom Age to come.
If this viewpoint had known that King Saul was a type of the Church under Pentecost, those teachers no doubt would say that Saul's Kingdom was "real" but was prophetic of this spiritual Kingdom.
The problem with this interpretation of the type is that Saul's Kingdom was as earthly as David's. The difference between these two kingdoms is not in their earthly character but in their spiritualcharacter. If anything, David's Kingdom was the spiritual of the two--not Saul's.
The real underlying question is this: What do you mean by Spiritual?
We best understand words and concepts by their contrasts. It is unfortunate that most of the time spiritual is contrasted with earthly or carnal. Thus also, the law is incorrectly contrasted with grace, as if they are opposed to each other. The law is often said to be carnal, while grace is spiritual. The result is that the law is maligned as an evil relic of the past, and some even go so far as to say that the devil gave the law to Moses. Such a view is blasphemous, for it turns Yahweh into the devil himself.
But Paul says in Rom. 7:14 that the law is spiritual. Did he mean some other law than that given by Moses? Not at all. The law has always been spiritual, for it had its origin in heaven and in the mind of God.
The law's manifestation, however, was earthly.
The Kingdom of God is always spiritual, but its manifestation is earthly. Jesus prayed in Matt. 6:10, "Thy Kingdom come, Thy will be done on earth as it is in heaven." The Kingdom is "coming" to earth from heaven. In other words, this spiritual Kingdom is manifesting in the earth. It is emerging into the earth a little at a time.
The Kingdom was present from the first moment of creation. It took a big step in emerging in the earth under Moses when the Passover Age began. It took another big step in emerging in the earth in Acts 2 when the Pentecostal Age began. It will take another big step in the Tabernacles Age, at which time there will emerge that first company of administrators who will fully manifest this spiritual Kingdom in the earth.
Let us look at it another way. John 1:14 says, "and the Word became flesh and dwelt among us." Was that Word carnal or spiritual? Jesus Christ, the Logos ("Word") was certainly spiritual, but He also became earthly in His incarnation. In fact, the word "incarnation" comes from the word "carnal." Did this make Jesus carnal in a negative sense? Of course not.
Having flesh and blood is not the problem. Being earthly is not the problem. It is not the goal to escape the earth and go to heaven. The goal is to bring heaven to earth. The goal is to manifest the full glory of God in the earth. The goal is to see the Word become flesh, or manifest in earthly flesh.
This is what the feast of Tabernacles is all about.
Thus, when God gave the law to Moses, He first spoke the law to the people. If they had been able to receive it verbally at that time, the law would have been written on their hearts. Instead, their hearts were hardened, and they refused to hear His voice (Ex. 20:18-20). If they had listened, the spiritual law would have been written on their hearts, and it would have begun to change their very nature to the image of Christ.
Instead, because of their refusal, God gave the law to them in written form. The law was not the problem--even in written form. The problem was the inability of the people to HEAR. Likewise, even after receiving the written law, the problem continued, for the people were unable to eat and digest it. In other words, they were unable to spiritualize it by transferring it from an external "plate" to their inward parts. Thus, they created "traditions of men."
The character of the law is always spiritual, but our concern has more to do with location. The law was always in heaven, but our concern is to bring it to earth. Once on earth, the law is either located outside or inside a person. Israel as a whole was not prepared to internalize it, yet we see a few examples of those who were different--such as Moses, Caleb, and Joshua. Years later, in the Age of Pentecost, a greater number of people were able to internalize this spiritual law, because a greater outpouring of the Spirit changed more hearts in a greater way.
As we digest it (internalize it), we spiritualize it, and thus it becomes part of us. In this way, we become the living Word, and the Word becomes flesh IN US. This is the only way we can truly manifest the spiritual law in our flesh.
This is also how the Kingdom of God comes to be within us. If the Kingdom is truly within us, then it has taken on a flesh body in order to manifest in the earth. The apex of this process is seen in the transfiguration of Christ in Matthew 17.
Dispensational theologians talked about the Church as a spiritual Kingdom, but they did not understand spiritual by its proper contrasts. Thus, they contrasted two kingdoms, a spiritual kingdom for the Church, and an earthly kingdom for the Jews. They should have been teaching a single Kingdom of God for all men and for the whole earth, a Kingdom that is and always will be spiritual, internal, and characterized by "righteousness, peace, and joy in the Holy Spirit" (Rom. 14:17).
As this Kingdom is internalized by spiritual digestion, we become what we eat, and the Kingdom of God is manifested in the earth in its citizens. Yet because those citizens can only be perfected by the three steps presented in the law of the feast days, it is not an instantaneous perfection. Thus, the progression of the Kingdom in each individual is seen over a life time, and in the corporate sense, it has taken thousands of years even to get to where we are today.
As the Kingdom progresses, it becomes more and more earthly--not in origin, but in manifestation. The earth itself is not the problem. When God created it, He pronounced it "very good" (Gen. 1:31). There are some who react against Dispensationalism's idea of a coming Jewish Kingdom by adopting the Greek world view.
Even as the Jewish idea was wrong, so also was the Greek view wrong. The Greeks taught that spirit was good and physical matter was evil. Hence, the Greeks believed that the ultimate solution to evil was to escape from matter and live in a purely spiritual existence. This idea has crept into the Church as a reaction against the idea of a Jewish Kingdom. But both are wrong. The truth is that matter was created very good, and that the purpose for the earth will be fulfilled. The purpose of creation was for the glory of God to manifest in the earth in this stuff we call physical matter (or "dirt").
So we need to understand that a spiritual Kingdom should not be contrasted with an earthly Kingdom. It can be both spiritual and earthly at the same time, even as Jesus was the Word made flesh. The contrast is in its administration. The Kingdom and its laws ought not to be administered in a carnal manner by the "old man" but administered by the "new man" in a spiritual manner--that is, by the mind of Christ.
God has been preparing people to do this very thing. Jesus gave us this example in Matt. 12:28, "But if I cast out demons by the Spirit of God, then the Kingdom of God has come upon you." Proper administration of the Kingdom brings it into the earth and manifests it from the internal, spiritual character to an external, practical, earthly reality. That is our job description.