I’m listening to an excellent podcast on monotheistic origins by Steve Wiggins and I thought I’d explore a couple of the points he discusses. First, Steve briefly refers to the tacit recognition of other deities by the authors of the Hebrew Bible and their reticence to rationalize or justify these literary references to them. That their existence just seems to be presupposed for the authors and thus for the readers is the most logical explanation of this reticence. Later, Steve mentions a common theory regarding crisis as the catalyst for the development of a monotheistic theology; specifically, the destruction of Jerusalem at the hands of the Babylonians. According to this theory, this crisis leads to a reevaluation of YHWH’s interaction with humanity and with Israel specifically. The end result is a theology that rejects the existence of other deities competing with YHWH (Babylon’s national deity, primarily) and attributes Israel’s destruction to their own failure to live up to their responsibilities vis-à-vis YHWH, and the resulting punishments.
I’d like to propose a slightly different theory that treats ideological utility as the catalyst for monotheism and moves it forward in time a few centuries. It seems to me that the putative monotheism of Deutero-Isaiah and parts of Deuteronomy supplies the former theory with the chronological markers that point to the Babylonian captivity as a primary suspect for this crisis/catalyst. I think that this crisis did influence Israelite theology, but not straight toward monotheism. I don’t interpret Deutero-Isaiah and Deuteronomy as monotheistic texts, but rather as indications of a universalized YHWH that only set the stage for the adoption of a more monotheistic theology at a later crossroads with Hellenistic culture.
Michael Heiser, I believe, has the best treatment available of the rhetorical function of the so-called monotheistic sections of Deutero-Isaiah and Deuteronomy (found here). To paraphrase (and expound a little), Deutero-Isaiah is not denying the ontological existence of other deities; rather, he is denying their efficacy and legitimacy. The language used by Deutero-Isaiah and Deuteronomy (“I am and there is no other,” “there is none beside me,” etc.) is also used in reference to Babylon, Moab (Isa 47:8, 10), and Nineveh (Zeph 2:15). The vernacular is placed in the mouths of Israel’s opponents, but the point is clear: these cities are not denying the existence of other cities, but rather that they are at all relevant in comparison (see Ps 89:6 and Isa 40:25). Deuteronomy 32 provides further indication that this is the correct reading. In v. 21 YHWH states, “They made me jealous with a non-god (בלא־אל) . . . so I will make them jealous with a non-people (בלא־עם).” The nation being referenced (Assyria-Babylon) is not one that does not exist, but one that is inconsequential in the eyes of YHWH. That this is part of the same propaganda is supported by v. 39 (ואין אלהים עמדי) and by Isa 40:17: “All the nations are as nothing (כאין) before him, he considers them as less than nothing (מאפס) and deserted (ותהו).”
That the authors of this rhetoric in no way deny the existence of other deities is also made clear by the proximity of explicit mentions of other gods. Deut 32:8–9 and 43, for instance, mention the sons of El and command “all the gods” to bow before YHWH, respectively. In Deut 4:19 the gods of the nations are explicitly said to have been established by YHWH for the worship of the people of those nations. Divine council imagery is also present in Isaiah 40 and 45.
If Deutero-Isaiah and Deuteronomy do not reject the existence of other deities, their theology is not monotheistic, but rather henotheistic, or monolatrous, or whatever you want to call it. It accepts the existence of other deities, but avers their incomparability with YHWH. This leaves little reason to insist monotheism was born of the Babylonian captivity. That the authors of exilic and post-exilic texts continue to seem to presuppose the existence of other gods undermines the assertion that they are now operating under monotheistic ideologies. Better indications, in my opinion, of the development of monotheism would be the removal of references to other deities, or the manipulation of literary conventions away from traditional henotheistic readings. Neither practice is found in exilic texts, but I find both rampant in Second Temple Judaism, when Judaism was most actively interacting with Hellenistic ideologies. Strict monotheism, as far as I can tell, was developed by Greek philosophy, not by Judaism, which, in my opinion, most likely appropriated philosophical monotheism from Hellenism. The monotheism of Xenophanes and others may have seemed enticing to Jews working hard to emphasize the transcendence of their deity and the irrelevance of other gods.
Two quick examples of this Second Temple Period paradigm shift come from Deuteronomy 32 and the re-conceptualization of the divine council. It is well known that MT Deut 32:8–9 is a corruption of the original text (Heiser discusses this here). LXX also emends the verse away from its polytheistic overtones, but a text from Qumran supports longstanding theories that we are dealing with an original reference to the “sons of El.” LXX Deut 32:43 manipulates the text away from polytheism, but, in my opinion, also attempts to recast the traditional identification of the “sons of El” (offspring of El and second-tier deities) as a reference to mere angels. I discuss this here. Satan is also recast as a fallen angel rather than a member of God’s offspring (see here). Other Second Temple Period literature supports the move on the part of the Septuagint toward the identification of the sons of God of Deut 32:8–9 as angels (Targum Pseudo-Jonathan on Deut 32:8). Sirach 17:17; 1 Enoch 89:59–77; 90:22–27). All of these emendations and theological innovations date to the Second Temple Period.
I think the prevalence of this propaganda supports the notion that a radical theological shift had taken place in the closing centuries of the first millennium BCE. I find no such paradigm shift in the theology of exilic literature. The proliferation of monotheistic emendations and ideological novelties during the Second Temple Period also provides a better context for the Jewish adaptation of monotheism. The evidence supports the appropriation of monotheism from Hellenism rather than the development of the idea in Judaism independently and chronologically prior to its development within the far more philosophically productive speculation of Greek philosophy.
 I say “more monotheistic” because I don’t believe the Judeo-Christian tradition has room for literal monotheism. The existence of angels and cherubim and so forth undermines the strict definition of “monotheism,” even though society has long used the Judeo-Christian paradigm as the de facto definition of the word.
 Heiser cites J. T. A. M. van Ruiten, “The Use of Deuteronomy 32:39 in Monotheistic Controversies in Rabbinic Literature,” in Studies in Deuteronomy in Honor of C.J. Labuschagne on the Occasion of his 65th Birthday (Leiden: Brill, 1994), 223: “The existence of other gods is not denied, however, only their power and significance for Israel.”
 “If God is the mightiest, He must be One; for were He two or more, He would not have dominion over the others, but, not having dominion over the others, He could not be God. Thus were there several, they would be relatively more powerful or weaker, and thus they would not be gods, for God’s nature is to have nothing mightier than He” (see Georg Wilhelm Friedrich Hegel, Hegel’s Lectures on the History of Philosophy (trans. E. S. Haldane; London: Routledge and Kegan Paul, 1896), 244).