Those who have not previously been exposed to Rabbinic literature are struck, when they face Rabbinic teachings for the first time and discover that the Rabbis teach through parable and allusion. They tell stories, pronounce aphorisms, and pun, relate and analogize. That is essentially what one encounters ina midrashic compilations. Why did they not employ the method of simple, straightforward exposition, like subsequent commentators? The answer perforce must reside, among other reasons, in the pedagogical imperative. It is well known that the best way to learn is with a story. The Rabbis superimposed a colorful world of relationships, events and connections upon the text so as to have us perceive and willingly accept, or might we say in modern "lingo", 'buy-in' into some fairly complex ideas. The parable serves as a means to education; it is rhetoric at tis best and most effective. By speaking to directly to the heart, they move, inspire and convince all at once. It is obvious that the Sages possessed traditions as to the intended significance of every story and character in Tanach. To this end, they went beyond what is described in the Scriptures and bequeathed us images, stories and characterizations that palpably embody central teachings received by tradition. In other words, the lessons are received form the previous generation, the way in which they are attached to the text are exegetical.
I do not for a moment mean to imply that midrashic stories are not historical. They are always eminently plausible and can usually be demonstrated to reside in the verses and be present within them by hint or allusion. Certainly, these stories contain a kernel of historical truth. That granted, there still remains a question: “Why do they choose to share this particular story from the character's life with us rather than some other one?” Proper understanding of the midrashic method calls for appreciation of the message. The message is the point of departure. One starts to study Midrash by discovering the key, the underlying idea or interpretation that is central to various, sometimes disparate rabbinic comments.
To summarize, careful correlation of various sayings of the Sages scattered among disparate midrashic sources leads us to several conclusions. First, the Sages possessed a tradition of interpretation, a set of exegetical keys widely shared across sources remote from one another in time and space. They possessed a technique and a method of how to present them to the students. Second, they expressed and transmitted their teachings by setting up an alternative parallel universe populated by the same characters found in the books of Tanach but with much richer detail and background. However, all such detail is designed to reinforce and transmit the received interpretative approach and a specific set of teachings. Different Sages might choose different details. Finally, echoes of many of these teachings can be found in the later books of Kabbala, which, after all, also deals with substantive questions of meaning and purpose, albeit from a more explicit perspective. This is why Kabbalistic mysticism has proven to be such an effective tool towards interpetation of inscrutable aggadot.

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