The aggadah is restricted to the classical rabbinic period and is found in two main sources, the Talmud and the Midrash. The aggadah in the Talmud is interspersed between the legal discussions of the rabbis. Side by side with the talmudic legal argument and search for the halakhah are sections about history, philosophy, theology, ethics, and folklore. The Talmud is thus the first source for the aggadah, which comprises roughly a third of the talmudic material.
Although there are some midrashic works which concentrate on the legal aspects of Jewish life, most of them are aggadic (see Midrash Aggadah). Because the midrashic literature developed over a period of nearly 1,000 years and was written in different countries, the midrashic aggadah bears evidence of varied influences--- not only in the language (Greek words in the Palestinian midrashim and Persian words in the Babylonian midrashim) but also in the philosophical concepts. It is sometimes necessary to distinguish between the authentic rabbinic theology, which subsequently entered the mainstream of Jewish doctrine, and the secondary material which is the result of the impact of Greek, Babylonian, or other external environments.
Since the term aggadah refers to the whole corpus of non-legalistic rabbinic literature, it has a very comprehensive meaning, but it is always didactic. First of all, it includes legends, mostly deriving from rabbinic expositions of the Bible and the biographies of rabbis and Jewish heroes. Other elements of aggadah are elaborations of the biblical story which provide an imaginative literary extension of the Bible narrative. Then there is a vast literature of Jewish folklore which has no thematic connection with the Bible story or with famous personalities in the post-biblical period; it may deal with Angels or Demons, or with quaint customs prevalent in some sections of the Jewish community.
There are also philosophical, particularly theological, concepts which are included in the general term aggadah. Sometimes these are explicitly stated and then there is no difficulty in identifying and explicating them. This applies particularly in the sphere of Ethics. For example, the Mishnah tractate Avot ("Chapters of the Fathers") is in this class of aggadic works, presenting a number of generally clear teachings about the concept of God, man, Israel, Torah, and the ethical life---all expressed in a clear and popular style. Very often such teachings are indirectly conveyed by a parable and the stories have to be explored in order to discover the implicit moral, since most of them are told without the storyteller making his point clear. In reading this genre of aggadah it is necessary to ask why the story is told. It then becomes clear that the piece is to be read not as historically true but as morally true.
There is, in addition, a wide and profound rabbinic theology which derives from comments on a biblical text. For example, as the very first letter of the Hebrew Bible is the letter bet, the rabbis ask, "Why does the holy Book start with the letter bet, which is not the first letter of the alphabet?" They answer that the bet is like a square with one side open. It is closed above, below, and at the back; it is open only in the front. This, they suggest, is to teach that man ought not to inquire what is in the heavens above, or in the netherworld, or what preceded Creation. The only sensible and practical way for man to live is to proceed forward in the one direction which is open to him. Frequently, this kind of brief comment is elaborated with an anecdote which expands it into the realm of true literary folklore.
Whereas the halakhah remained the law which had to be practiced until it was changed or abrogated by a competent authority, the aggadah was held to be nothing more than the personal opinion of its author and had no binding force upon the community. The rabbis refused to base laws on aggadic material, miracle tales, folklore, and legend. However, there is a significant fusion of halakhah and aggadah which invalidates the strict separation of the two. The ethical teachings of the aggadah frequently inform and influence the spirit of the legal halakhah, so that the law then becomes more sensitive to the human situation. The modern Hebrew poet and scholar Ḥayyim Naḥman Bialik pointed out that aggadah is a refinement of the halakhah, while halakhah is a codification of the essence of the aggadah. In other words, aggadah has made the law more ethical and halakhah has made the ethics more obligatory.
Efforts have been made to present the aggadah in special anthologies. The most noteworthy and thorough work in this field was carried out by the 15th-century Spanish scholar Jacob Ibn Ḥabib, who recognized the vast appeal of aggadah to the Jewish masses. He therefore compiled a special edition of the Talmud which excluded all halakhah and its discussions and included only the aggadah. This volume, entitled En Ya'Akov ("Jacob's Well"), is to this day a popular text in synagogues and study circles. A modern anthology, the Sefer ha-Aggadah ("Book of Aggadah," 1910), was compiled by Bialik and Y.H. Rawnitzki. Another major achievement, in English, was The Legends of the Jews (7 vols., 1909-38) by Louis Ginzberg.
Aggadah (Aramaic אַגָּדָה: tales, lore; pl. Aggadot or (Ashkenazi) Aggados; Also known as Aggad or Aggadh.) refers to the homiletic and non-legalistic exegetical texts in the classical rabbinic literature of Judaism, particularly as recorded in the Talmud and Midrash. In general, Aggadah is a compendium of rabbinic homilies that incorporates folklore, historical anecdotes, moral exhortations, and practical advice in various spheres, from business to medicine.
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The Aggadah is part of Judaism's Oral law (תורה שבעל פה) — the traditions providing the authoritative interpretation of the Written Law. In this context, the widely held view in Rabbinic literature is that the aggadah is in fact a medium for the transmission of fundamental teachings (Homiletic Sayings - מאמרים לימודיים) or for explanations of verses in the Tanakh (Exegetic Sayings - מאמרים ביאוריים). In Rabbinic thought, therefore, much of the Aggadah is understood as containing a hidden, allegorical dimension, in addition to its overt, literal sense. In general, where a literal interpretation contradicts rationality, the Rabbis seek an allegorical explanation: "We are told to use our common sense to decide whether an aggada is to be taken literally or not" (Carmell, 2005).
Rabbi Moshe Chaim Luzzatto, the Ramchal, discusses this two-tiered, literal-allegorical mode of transmission of the Aggadah in his well known Discourse on the Haggadot. He explains that the Oral Law, in fact, comprises two components: the legal component (חלק המצוות), discussing the mitzvot and halakha; and "the secret" component (חלק הסודות), discussing the deeper teachings. The aggadah, along with the Kabbalah, falls under the latter. The rabbis of the Mishnaic era realized the danger of recording the deeper teachings in explicit, mishnah-like, medium. Rather, they would be conveyed in a "concealed mode" and via "paradoxes". (Due to their value, these teachings should not become accessible to those "of bad character" and due to their depth they should not be made available to those "not schooled in the ways of analysis".) This mode of the transmission was nevertheless based on consistent rules and principles such that those "equipped with the keys" would be able to unlock their meaning; to others they would appear as non-rational or fantastic.
In line with the above, Shmuel ha-Nagid, in his "Introduction to the Talmud", states that "Aggadah comprises any comment occurring in the Talmud on any topic which is not a commandment (i.e. which is not halachic) and one should derive from it only that which is reasonable." As regards this, Maimonides, in his preface to the tenth chapter of Tractate Sanhedrin (Perek Chelek), describes three possible approaches to the interpretation of the Aggadah.[1]
Note that Maimonides' approach is also widely held amongst the non-rationalistic, mystical streams of Judaism — thus, for example, Rabbi Isaiah Horowitz, the Shlah HaKodosh holds that "none of these sometimes mind-boggling 'stories' are devoid of profound meaning; if anyone is devoid of understanding, it is the reader" (Shnei Luchos HaBris, introduction).
The aggadah is today recorded in the Midrash and the Talmud.
In the Midrash, the aggadic and halakhic material are compiled as two distinct collections: 1) The Aggadic Midrashim, generally, are explanatory aggada, deriving the "sermonic implications" from the biblical text; and 2) the Halakhic Midrashim derive the laws from the text. Many of the Torah commentaries, and the Targumim, interpret the Torah text in the light of Aggadic statements, particularly those in the Midrash, and hence contain much material on Aggadah interpretation.
Throughout the Talmud, aggadic and halakhic material are interwoven – legal material comprises around 90%. (Tractate Avoth, which has no gemara, deals exclusively with non-halakhic material, though it is not regarded as aggadic in that it is focused, largely, on character development.) The Talmudic aggada, generally, convey the "deeper teachings" - though in concealed mode, as discussed. The aggadic material in the Babylonian Talmud is presented separately in Ein Yaakov, a compilation of the Aggadah together with commentaries.
Well-known works interpreting the Aggadot in the Talmud include:

The Aggadah has been preserved in a series of different works, which, like all works of traditional literature, have come to their present form through previous collections and revisions. Their original forms existed long before they were reduced to writing.
The first traces of the midrashic exegesis are found in the Bible itself; while in the time of the Soferim the development of the Midrash Aggadah received a mighty impetus, and the foundations were laid for public services which were soon to offer the chief medium for the cultivation of Bible exegesis.
Much Aggadah, often mixed with foreign elements, is found in the Apocrypha, the Pseudepigrapha, the works of Josephus and Philo, and the remaining Judæo-Hellenistic literature; but aggadic exegesis reached its highest development in the great epoch of the Mishnaic-Talmudic period, between 100 and 550 CE.
The Aggadah of the Amoraim (sages of the Talmud) is the continuation of that of the Tannaim (sages of the Mishna). The final edition of the Mishnah, which was of such signal importance for the Halakah, is of less significance for the Aggadah, which, in form as well as in content, shows the same characteristics in both periods.
It is important to emphasize the fundamental difference in plan between the midrashim forming a running commentary (מאמרים ביאוריים) to the Scripture text, and the homiletic midrashim (מאמרים לימודיים). When the scholars undertook to edit, revise, and collect into individual midrashim the immense array of haggadot, they followed the method employed in the collections and revisions of the halakhot and the halakhic discussions.[citation needed] The form which suggested itself was to arrange in textual sequence the exegetical interpretations of the Biblical text as taught in the schools, or the occasional interpretations introduced into public discourses, etc., and which were in any way connected with Scripture. Since the work of the editor was often merely that of compilation, the existing midrashim show in many passages the character of the sources from which they were taken. This was the genesis of the midrashim which are in the nature of running haggadic commentaries to single books of the Bible, as Bereshit Rabbah, Eikah Rabbati, the midrashim to the other Megillot, etc. See Midrash for more details.
The Ein Yaakov is a compilation of the aggadic material in the Babylonian Talmud together with commentary. It was compiled by Jacob ibn Habib and (after his death) by his son Rabbi Levi ibn Habib, and was first published in Saloniki (Greece) in 1515. It was intended as a text of aggadah, that could be studied with "the same degree of seriousness as the Talmud itself".[2] Popularized anthologies did not appear until more recently - these often incorporate "aggadot" from outside of classical Rabbinic literature. The major works include:
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