Many theologians are inclined to view the primary function of grace as one of contradiction or disruption of present creaturely existence. The “new creation” (Paul) is an eschatological reality. It does have current manifestations but mainly by way of revealing (a noetic category) our present abidance in sin, little by way of transforming (an ontic category) our lives into a genuine holiness. John Webster is hard to pin down on this issue, but in the following passage he expresses this (typically Protestant) view:
…the Church’s holiness is visible as it confesses its sin in penitence and faith. The Church is consecrated by the Father’s resolve, holy in Christ and sanctified by the Holy Spirit. Such holiness is not achieved perfection, but an alien holiness which is the contradiction of its very real sinfulness. The Church is holy, not because it has already attained the eschatological state of being ‘without spot or wrinkle’, but because the promise and command of the gospel have already broken into its life and disturbed it, shaking it to the core. The Church is holy only as it is exposed to judgment.
This means that, far from being a matter of confident purity, holiness is visible as humble acknowledgment of sin and as prayer for forgiveness. ‘There is no greater sinner than the Christian Church,” said Luther in his Easter Day sermon in 1531. It is in repentance, rather than in the assumption of moral pre-eminence, that holiness is visible. …Realized moral excellence does not necessarily constitute holiness and may contradict it.
Holiness, pp. 73-74
Penitence is, thus, the primary function of grace, and as a penitent people, the Church witnesses to the one alone who is holy, Jesus Christ. Not I, but Christ. “Witness,” like “reveal,” is a noetic category, at least insofar as it is signifying not one’s own reality, but another reality. Other theologians, however, are more inclined to view the primary function of grace as both condemnation and constitution. Holiness can really be predicated of the Church. Of course, the Protestant fear of this typically Catholic approach is that the Church, the objects of grace, become the focus (“look how holy we are!”, “we are justified in our acts!”), instead of the giver of grace, God, from whom all holiness exists. Hans Urs von Balthasar understands the issue well (far better than I do!), as seen in such careful distinctions as “grace is a de facto property of nature, not a de jure property.” We do not merit the grace given, much less are we entitled to it, but in the grace given we in fact do partake in the life of God — His existence as love. Here is a passage where von Balthasar expresses this understanding, against the Protestant eschatologists:
According to Catholic doctrine, grace is that self-disclosure and self-communication of God in which God no longer possesses his own divine inner life for himself but now bestows it upon the world and thereby gives the creature a share in it. Now because God is both absolute spirit and absolute Being, this sharing in God’s life must also be both something conscious and ontically real: or what amounts to the same thing, it can only be understood as simultaneously involving both an event aspect as well as an ontological aspect.
If it were merely something conscious and cognitive — that is, if God were known in his self-revelation only as a truth about himself that the creature would have to accept and to believe — then even though we might think we had been enriched by this knowledge, the gain would prove to be entirely illusory. For really all we would have gained is a view of a world to which we were otherwise forbidden entry. But this kind of merely cognitive revelation of a divine world is inherently contradictory and impossible, because God’s truth is one with his Being (this is expressed in the statement that God is love). In other words, God cannot communicate his truth without at the same time giving us access to his Being.
…God’s revelation can only be an event if something actually takes place. …In fact, if nothing actual occurs between God and man that can be expressed ontologically, then in fact what happens is…nothing at all.
The Theology of Karl Barth, pp. 364-5
Of course, the problem remains, as von B notes elsewhere, that the Christian is indeed, in some sense, both sinner and saint. In our pre-resurrection existence, sin is real — but holiness is also real. Both penitence and charity can and do constitute the visible holiness of the Church, as indeed even John Webster notes the Church’s “constitutive character of its holiness” (p. 76) in its prayer for God’s enactment of his holiness in the Church.