Salvation is both individual and communal; on the one hand, the Holy Trinity dwells within me; the Holy Spirit dwells within me; Christ our God died for me; on the other hand, precisely as saved we are made into a new people, a unified people. As an image of this reality, the Holy Trinity chose the People of Israel; with them God made a Covenant, for them He gave the Law, all for the sake of preparing man for the Holy Incarnation of the Anointed One; in preparation for the New Covenant, the final covenant, which will last until the Lord returns in power. As the Old Covenant created a people, so the New Covenant creates a New People.
The Head of this new people is Christ - He is its Founder, but unlike Lycourgos and Solon, He transcends mere political foundings - these are but images, albeit natural images, for our longing to be the People of God. Next to Him these founders are almost irrelevant. As our heritage He gives us the freedom and dignity of the Sons of God. Our commands, our Law, is the Gospel. Christ is the New Moses, the form of all political foundings.
Lumen Gentium calls this new people a 'messianic people' - the People of the Anointed One. It does not include all men (yet), and often looks like a small, insignificant, contemptible flock of filthy sheep, but it is truly the unity, hope, and salvation for the whole human race. It is His instrument for the salvation of all; it is the Light of the World and the Salt of the Earth. Like ancient Israel, it is called a Church or Assembly (cf II Esd. 13.1, Num. 20.4, Dt. 23.1), and as Israel wandered in exile, the Church has here on earth no lasting city, and longs for Her Promised Land, which will be revealed only after the Apocalypse.
This second chapter concerns the entire People of God, from the highest of the Patriarchs to the lowliest of the peasants. All the baptized (a precise, ritual definition, one which instantly and intimately recalls the Mysteries of Christ our God, and the Church as Mystery) are a spiritual temple and a holy priesthood, a priesthood in which all offer spiritual sacrifices and proclaim the redeeming power of our God.
Such a definition introduces us to the distinction between the hierarchical and baptismal priesthood. Both are intimately interrelated and yet essentially different. Each is a participation in the one priesthood of Christ, Who is the Form of both, since both are ways of Caritas - self-giving, self-emptying love. For now, the Council will address what they have in common; it will examine both separately later.
The holy nature and living structure of the priestly people is awakened into growth through the Seven Holy Mysteries and exercise of the virtues, both human and divine. One becomes fully a priest in this way by means of Baptism, Confirmation, and Holy Communion. Penance, Matrimony, and Holy Orders are also mentioned (the last only just), emphasizing that all are called to perfect holiness, as God our Father is holy.
The People of God participate not only in the Priestly Office of Christ, but in His Prophetic Office as well. We share in His prophetic mission very simply: by spreading a living witness of faith, hope, and love. Again, it is shown by our sensus fidelium, our instinct for the faith, an instinct common to both the hierarchy and the laity, an instinct nourished by the Spirit of Truth and the Word of God. The charismatic gifts, signs of the Spirit's presence, are also expressions of the prophetic office.
Finally, the People of God are related to Christ as King. All men are called to become a part of the New People of God. Man was created in unity; after the Fall, he scattered into families, tribes, and nations, devolving again and again into fratricidal war; but it was God's will that we be brought again to unity through Christ Jesus the Lord, Who is the Source of our coming-together and the Cause of our faith.
Clearly then (cf. LG 8), there is only one People of God; and this People is of course the Catholic Church, the One People taken from every tribe and nation; from all of these we who were many are now made one, citizens of the Heavenly Kingdom. Thus it is that the Church, as Kingdom of Christ, ennobles, purifies, and strengthens the good elements of each culture She encounters (though other foul customs She abolishes). Such a tradition contributes to Her unity, but Her unity is not a sterile, mechanical uniformity, but harmony; man complements woman; layman complements the priest; the priest complements the monk. What results is not discord, but (provided that each does his work according to and for the sake of love) a richer, fuller harmony: unity in faith, unity in hope, unity in love. For this reason we can all profess the same faith, be in communion with the same Church, and yet live in different local Churches and accomplish different task; serving the poor does not take away from defending the unborn; devotion to the Most Holy Liturgy does negate our zeal for the oppressed, for we are one.
After examining the People of God qua priest, prophet, and King, the Council turns to the question of communion with the Church, and who has it. Similar questions are raised in Nostra Aetate and Unitatis Redintegratio. The Council answers this question in terms of descending order; those who experience the most or fullness of communion with those who experience it the least. Are there persons who experience absolutely no communion with Her? We shall see.
This examination begins with a traditional affirmation: the Church is necessary for salvation (extra Ecclesiam nullus salus est); outside the Church there is no salvation, or phrased positively, all salvation is inside/through the Church. In our egalitarian, equality-obsessed age, little arouses more wrath and accusations of intolerance - and perhaps rightly so, for does that not seem to imply that external membership in the Church suffices for salvation, and lacking this necessarily leads to damnation? It does not. Blessed Augustine, our father among the Saints, would lament concerning the Church, "How many sheep without! And how many wolves within!" This same Saint taught us both hope and the trembling of fear when he said, "Do not despair; one of the thieves was saved; but do not presume, for one of the thieves was damned." In our ancient Tradition (of which holy Augustine is but one example), external membership does not suffice for salvation. The Council emphasizes the same, teaching that we must persevere and be alive in love; our heart and our work must be right; take hold of this, and not let go of the other.
The Council turns to something very weird immediately after the repeated traditional teaching: "whoever then, knowing the Church was made necessary for salvation by Christ Jesus, would refuse to enter or remain in Her, could not be saved." What on earth can this mean? How could someone believe that the Church was necessary for salvation and not enter and or remain in Her? It seems as if the number of men to which this text is zero; it seems to describe a psychological impossibility, for it is hard to imagine anyone abandoning the Church for any other Christian denomination while believing they would be damned for doing so. All the more so for total apostasy (for in that case, one would a) cease to believe in damnation at all; or b) believe salvation could be found within another religion)! One would become Orthodox, for example, because one believed the Orthodox Church, not the Catholic Church, enfleshed the truth; in this case, one asserts that the Catholic Church's teachings are wrong. I have no answer to this objection, and I cannot say why Lumen Gentium includes such a phrase.
Lumen Gentium continues with an answer to the question of who experiences full communion, and that is (unsurprisingly) exclusively Catholic Christians, believing and practicing all that She believes and teaches; who are moreover persevering in love.
Next, the Council acknowledges the links between the Church and those Christians not preserving the entirety of the Faith and not in communion with the Successor of Peter. Protestants (at least those who acknowledge Baptism) seem to be alluded to first, then the Eastern Orthodox. To foster reunion, the Council urges the perpetual path of penance taught in §8, "that the signs of Christ may shine more brightly over the face of the Church."
Finally, the relation between non-Christians and the Church is discussed. First mentioned are the Jews, who because of Abraham their father, are treasured in the eyes of God; though what this means has since the Council been thought, "The Law of Moses suffices (at least for the Jews) unto salvation, which is blasphemy. It would also mean there is no mission to the Jews, which is plainly contrary to Scripture (Galatians, Roman, Ephesians, and Hebrews, which treat also of the insufficiency of the Old Law qua salvation) and the lived witness of Holy Tradition. This view is an abomination.
Second are mentioned the Muslims, "Professing to hold the faith of Abraham" - which does not mean they actually do. Does it mean they worship the one true God? The text "along with us" certainly seems to imply that, but if God is beyond good and evil - i.e. His holy will determines good and evil - then Christians and Muslims do not worship the same God, even though their understandings of natural theology would be very close, even identical in some ways. Both religions being monotheistic does not require both to revere the same Holy One. If the view is different enough, one is justified in saying this (cf. II Cor. 11.4). This probably requires its own space, so no more attention will be given here, save: the Church in this Council is concerned with reconciliation (rightly so) and peace between all (a laudable goal); thus in characterizing those outside Her bounds, She prefers to describe them in the most positive terms possible. But these pastoral statements must be read in light of and in continuity of what came before, so looking to what other statements on Islam have been in the past might be helpful.
Third, even polytheists/pagans/idolaters are called to faith, as are those who believe nothing divine revelation; the Council mentions the invincibly ignorant, which applies, in various degrees, to all non-Catholics. Their salvation is not intrinsically impossible, even if they die outside the visible boundaries of Holy Mother Church. All have some form of communion with the Church, then, if only being part of the call to love and know Her as Mother and Christ as Lord – She is cut off from absolutely none.
Lest this result in the apathy of the missionary spirit (which it seems to have done since the '60s), the Church gives us a reality check: Even though salvation is possible by ways outside the visible Church, ways known to God alone, "Very often," men are deceived by the Liar, persuaded to worship a creature rather than the Creator; or being overwhelmed by the misery in the world and dying in despair. Presuming on the first half of §16 is a colossal error, the Council seems to be saying. It is possible for a man to cross a desert lacking food and water, but presuming on that possibility is stupid when planning a journey.
Contra that foolish view, Christ is the sure Source of salvation, Who rescues us from our "slavery to error" (cf. those mentioned in the first half of §16). Hence the Church is the herald of the Good News, and She purifies the good encountered in the various peoples She meets when She proclaims the Risen Christ to them - to the bewildered confusion of the Foul Serpent and the glory of the Holy One. Therefore, the Church both prays and labors that the whole world become joined to the One People of God (cf. §§8, 13), our Holy Mother the Catholic Church.