I'm reading through Terence Donaldson's Jews and Anti-Judaism in the New Testament. My summary of the first chapter is here: Introduction.
Today I want to summarize his again excellent chapter 2 on Matthew.
Donaldson ends up laying out three basic positions on the issue. But it is worthwhile to get the mother of all potentially anti-semitic verses out on the table before giving them, as he does: "Then the people as a whole answered, 'His blood be on us and on our children!'" (Matt. 27:25, NRSV). This verse has often been taken in Christian history as an indication that Jews remain perpetually under blame for the death of Jesus. Throughout history, people who call themselves Christians have used the verse as an excuse to persecute and kill Jews, just as some people would do toward homosexuals today hiding behind other verses.
The three positions are:
1. Rejection of ethnic Israel and replacement by a Gentile Church
This interpretation of Matthew sees God having bent over backwards to give Israel every opportunity to respond so that their final rejection and replacement are finally justified. In the end, the Church is almost completely Gentile. The Great Commission is understood to say, "Go and make disciples of all the Gentiles"... and not the Jews, by implication. This is a possible translation.
This interpretation sees a transition within the Gospel of Matthew from a beginning that still holds out hope for Israel to an end that has completely abandoned Israel. The Gospel begins with a genealogy that firmly connects Jesus to Israel. The mission in Matthew 10 is to the lost sheep of Israel and excludes Gentiles and Samaritans. Initially, Matthew distinguishes the leaders of Israel from the crowds. Then, in this interpretation, the distinction falls away at the time of crucifixion, where the crowds join the leaders. In this interpretation, the Great Commission now excludes Israel and the mission is now toward the Gentiles, with the Church fully replacing ethnic Israel, which is now soundly rejected. Some with this position might even argue that Matthew was written by a Gentile to a Gentile church.
2. Rejection of ethnic Israel and replacement by a Church with both Jews and Gentiles
This is a somewhat softer version of the replacement interpretation. Israel is rejected and replaced by a "third race" that is neither Jew nor Gentile. So "even if--as is quite likely--Matthew sees the destruction of Jerusalem as divine punishment on 'this generation' for its persecution of the line of prophets that culminates with Jesus (23.29-36), the idea of definitive rejection does not necessarily follow" (41).
By the way, I wholeheartedly agree with this quote. The way Matthew has edited the Parable of the Wedding Banquet in 22:7 implies that Matthew was written after the destruction (compare the version in Luke 14). I see comments like 27:25 more as explanatory and backward looking than forward looking--this is why God allowed Jerusalem to be destroyed in the past. I can accept that it might also have functioned as a polemic against competing Jewish groups of the time (e.g., perhaps the Pharisees about to set up shop at Jamnia).
Against the "complete shift" version #1 above, this version argues that the people are once again distinguished from Israel's leaders after the crucifixion in 27:64. And throughout Matthew, the phrase "all the nations" presumably includes Israel (e.g., 25:32). Cannot the Great Commission be read as an extension of the mission to the nations rather than a shutting of the door to Israel?
3. The Church as the lost sheep of Israel, joined by Gentiles
This is my position and the one to which I believe Donaldson is most sympathetic. In this perspective, "Matthew has an Israel-centered view of the group to which he and his readers belong" (43). The author thus has a "remnant or sectarian outlook." The Gentiles thus join the restored portion of Israel rather than replacing them.
On the one hand, "Matthew seems to have little interest in those aspects of the law that would have differentiated Jew from Gentile (e.g., circumcision, food laws)" (44). On the other, he is quite keen to see Jesus bringing a fulfillment to the OT Scriptures, including its law. Matthew thus argues for the most meaningful kind of continuity between believers and the Israel of the past.
As far as the purpose of the rhetoric, most consider it "social formation." The goal is not so much to vilify others as to create internal group cohesion (kind of like when I go Wesleyan on the blog). Another interesting twist Donaldson mentions is the irony of Christ's blood being upon someone. Why yes, his blood is on us to save us from our sins (1:21)!