Pannenberg’s treatment of the atonement in Jesus - God and Man is one of the best short discussions of the subject available. Unlike most classical atonement theologies, Pannenberg’s integrates the whole gospel story and the resurrection into his account of the meaning of the atonement. One of the best parts is his discussion of substitution.

He has high praise for Luther, but faults him for basing substitution not on “the human course of the event” but on the incarnation (278). His own account is very much rooted in anthropology, what he claims is a biblical anthropology.

Critiques of substitution fail because they assume “an extreme ethical individualism that has been characteristic of modern man’s self-understanding up to the middle of this century” (265; he includes even Ritschl in this condemnation). For Scripture, he argues, there is a “natural-law relation between the deed and its consequence” (265). Death is the “wages” of sin, and the terminology of guilt and sin in the OT “designate the evil deed as well as the misfortune following it” (265). Christ becomes sin  in that “the misfortune following from our sin has fallen upon him” (265). Punishment isn’t an arbitrary and extrinsic imposition, but the outworking of the wrong itself. (Though I think this generally accurate, Pannenberg misses a beat , as his formulation seems to mechanize the relationship between sin and judgment and leave little room for the intervention of the God who “delivers over” idolaters to their idolatry [Romans 1].)

On this basis, ancient Israelites believed that the wrong done by an individual would have social consequences: “the deeds of men, especially the evil deeds, pregnant with impending misfortune, have their effect to a great extent independently of the person of the doer. To be sure, they do have a tendency to fall back upon the head of the doer, but so long as their destructive effect has not found its target, it can involve wider circles of society.” This is the basis for punishment, a turning-back of the evil deed on the doer to prevent its spread. Though Pannenberg does not mention it, this is also a way of understanding the symbolism of the purity system: the spread of defilement mimicking the spread of evil. On this basis too, it was believed that “the catastrophe inherent in the deed can be directed to some other being and so annulled” (267).

Pannenberg doesn’t accept all of the conceptual apparatus involved in this biblical portrait, but he thinks that the insight that guilt has a social component can be stated in updated terms: “The relation between guilt and the social group is not sufficiently clarified by an extremely individualistic understanding of guilt. It is grounded in the social character of human existence that every person continually deals in responsibilities that include other people to some degree. Every person is involved in the society i which he lives by what he does and by his share in the deeds of others. In social life, substitution is a universal phenomenon, both in conduct and in its outcome. Even the structure of vocation, the division of labor, has substitutionary character. One who has a vocation performs this function for those whom he serves,” and he substitutes for others because he performs services that others would have to do themselves if he did not perform them. “Especially in extraordinary times one experiences the fact that the condition of good and evil can be borne vicariously by individuals. Much that befalls the society as a whole affects some of its members in particular who, in such a situation, represent the entire society” (268).

Pannenberg stays at a high level of abstraction here, but he seems to have in mind something like this: Hitler rises to power, and begins to expunge Jews from Germany. A citizen of German may not be personally guilty for that crime, but he is certainly engulfed in the crime. If he has opportunity to save Jews, he should: He intervenes in a situation of sin and guilty and takes responsibility to correct another’s act of injustice. Any time one person repairs the damage caused by another’s evil, he or she is bearing the burden of another’s guilt. In this very sense, Jesus bears guilt without being guilty, takes responsibility for our sins, because He takes action to undo what we have done. 

In this way, the vicarious work of Jesus can be seen as an expression of the “universal phenomenon” of substitution.