Donald Macleod has some perceptive things to say on this subject:-
And here we come to a remarkable fact, which sometimes causes evangelicals a great deal of trouble: the Bible never suggests that man lost this image. It never even says that this image is marred in man.
Let me say at once that I would yield to no one in emphasising the enormity of indwelling sin, the reality of total depravity, and the extent and power and pervasiveness of corruption in the heart of a human being. I happen to regard that doctrine as the single most important doctrine in the whole area of practical religion. Indeed, the view we hold with regard to the extent of human sin will determine whether we are evangelicals or non-evangelicals. As Anselm said long ago, the whole reason why people so often have low views of the Person of Christ and low views of the Cross is that they have not pondered the gravity of sin. Similarly, the reason why the Bible is a closed book to the natural man is that it is addressed to sinners, and unless you know yourself to be a sinner it will make no sense whatever to you. I want to stress, then, that I believe in total depravity, that I believe in the pervasiveness of sin, that I believe in the spiritual powerlessness of man and that I believe original sin to be a fundamental doctrine, maybe the fundamental doctrine, of evangelical religion. But I also believe that man still retains the image of God and I maintain that not on any grounds of pure logic, but on grounds of explicit biblical teaching.
In Genesis 9, for example, when God, responding to the violence that prevailed in the world before the Flood, moved in to protect human life and to assert its sanctity, he laid down that very solemn ordinance, ‘Whoso sheddeth man’s blood, by man shall his blood be shed’ (verse 6). Why? Because ‘in the image of God made he man’! The whole logic behind the principle of the sanctity of human life and behind the ordinance of capital punishment was that even man in the person of Noah and his descendants, fallen man, was deemed to bear the image of God.
We find the same idea in the Epistle of James: we use our tongues, he says, both to praise God and to ‘curse men, who have been made in God’s likeness’. (Jas 3:9, RSV) This clearly assumes that man as he exists today is a bearer of the image of God. That is why slander and defamation are so serious.
The same assumption underlies Paul’s argument in 1 Cor 11:3 ff. A man’s head must not be covered because he is the image and glory of God (verse 7). There is, of course, a problem here, because it is to the male of the species that the concept of divine image-bearing is referred and the ladies do not, at least on the face of things, come out of the passage with quite such a halo as the men. But the point is that even after the Fall man is deemed to bear the image and to be the glory of God.
It is of enormous practical importance that we should view our fellow human beings in this light. As bearers of the image of God they are gifted with rationality, creativity and an aesthetic sense. They are gifted with a capacity for fellowship: ‘Let us make man in our image’, not, ‘Let me make man in my image’. Man is made in the image of the withness, the togetherness, the socialness of God himself. ‘It is not good for man to be alone’: there is tremendous teaching there for us. God lives in, and is blessed in, relationships. He is blessed in the togetherness of Father, Son and Holy Spirit. If he made us in his image, then we, too, are made for relationship. And yet how many human beings are frightened of relationships! The great teaching of Gen 2:18 is that it is not good for man to be alone. The human tragedy is that while we can avoid all the pain in life by avoiding relationships, in following that safe and lonely road, we also avoid all the joy in life. It is at the very point – withness -where man ought to have found his fulfilment, that he so often finds frustration and pain. Even in evangelical churches there is a drawing away from relationships. There is a fear of getting hurt. There is much emphasis on individualism and solitude: and a reluctance to commit ourselves to others. That is a violation of our nature as bearers of the image of God.
Men and women can never lose the image of God. It is so important for us to remember this as we teach our children in our homes and schools, as we serve in the various caring professions, as we meet men and women in the courts, as we see them in the gutters, as we legislate for them and as we try to rescue them. At those very points at which we are tempted to despise them, we despise him in whose image every human being is made. Is it not the very core of the horror of fascism and apartheid and anti-Semitism that they forget this great primal fact that man in all his ethnic, social, economic and moral variety remains a bearer of the image of God?
I have had the privilege of visiting the Holocaust Memorial in Jerusalem and to stand close to the overpowering evidence of the inhumanity of the Gentile to the Jew. Those Jews, slaughtered in circumstances of indescribable barbarity, bore the image of God. The death-squads and the doctors who committed those appalling experiments on Jewish men, women and children, the crematorium-attendants who moved the corpses into the pits and pushed the living humans into the incinerators and shovelled the dust and the ashes into the bins also bore the image of God. They shall answer, and have answered, for what they did, precisely because man never ceases to bear that image, and man never ceases to be responsible for his conduct. The Nazi cannot turn to God and say, ‘Ah, Lord, but that day I was an animal.’ No! On that day he was a human being. On that day he acted as one made in the image of God.
It is a cause for deep concern that evangelical pronouncements and social judgments so often reflect the security born of self-righteousness. If only we remembered what we ourselves have sunk to, and would have sunk to but for the grace of God, it would temper many of our sweeping condemnations.’
(A Faith to Live By)