Overview: A history of the Oral Law starting from Moses at Sinai, passed on from generation to generation, and the early development of dispute and sophistication in the Oral Law.
At Sinai, all the Jewish People experienced Revelation from G-d and heard the Lord call out to Moses to ascend the heavens and receive the Torah (as explained in chapter “The Mass Revelation Argument” in Vol. 1 of The Rational Believer Series). This was why the Israelites put their faith in Moses.
Besides for the Written Torah Moses handed us, we were also given some oral traditions, derivation tools, and the rabbis were accorded the power to legislate and general authority in cases of dispute. Throughout the 40 years of the sojourn in the Wilderness, we can only imagine that the sages, including Moses, used the derivation tools to expound the Torah, and many laws were passed at the onset in order to fill in the gap of missing details.
One generation passed on the tradition to the next, including the newly developed laws that the High Court would legislate when new cases would arise. The High Court would usually write down all of their conclusions and the reasoning behind them. It was permitted (in many cases) for one generation to argue on the previous generations’ decisions. However, they usually refrained from doing so. This was because of two similar reasons: (1) They would respect the previous generations’ rulings because the early sages were closer to the Sinai tradition and were thus assumed to be more accurate. It would therefore be inappropriate to dispute them. (2) They had no reason to make changes if the matter was already settled and accepted by the general population.
In the case of an argument, it was quickly resolved with the High Court’s vote.[i] Frequently, many of the documented debates would get lost, and the arguments would re-arise.
There’s not much to say about the early generations’ preservation of the Oral Tradition because, as a whole, things ran very smoothly according to the system of the High Court. As an old saying goes “no news—is good news.”
In the days of the anshei kneses hagedolah, the Men of the Great Assembly (circa 350 B.C.E.), things began to complicate. Until that time, only few enactments were legislated and enforced. It would seem that this was because as a whole the High Court had limited power under the monarch of Israel and Judea. We can also assume that they were too busy combating for monotheism and basic Torah-education to focus on creating and yet alone enforcing enactments. When the power was strictly in the hands of the rabbis, the Men of the Great Assembly enacted many new legislations that were passed in order to recover from the major spiritual downfall the Jews encountered throughout the 70 years in Babylonian exile.[ii] 
In addition, a general script was formed by this High Court, a script that entailed almost the entire Oral Law. This script was not written but was intended for teachers to use in study (the teachers, with their brilliance, were of course able to memorize this script). Alternatively, it was written but intentionally not publicized for the public. This script was a precise and organized wording; this is later to become the basis for the Mishnayos.[iii] 
This is how things were up until the times of Yossi Ben Yoezer and Yossi Ben Yochanan. They were contemporary sages in the mid-Second Temple era (circa 150 B.C.E.). In their days, the somewhat peaceful era was coming to an end with the Greek oppression followed by the Roman’s. This was besides for the inner struggles within the power of the High Court in contend with the powerful upper-class Sadducees. As a result, the High Court would open and close, open and close, struggling to maintain its influence and authority.
Struggling to keep civil matters and basic religious matters under control, the sages couldn’t find the time to discuss, dialogue, and vote on a matter that is now to become the first documented unresolved argument. The argument, in short, was whether or not we should lean our hands on a sacrificial animal (that is deemed muktzah on Shabbos and Yom Tov) on the holidays, a practice done during the week to sanctify the beast.[v] It is very possible that the High Court gave a temporary unformal ruling without as much thought, discussion, and debate as needed, only for the sake of having a practical Halacha to do. Hence, it was still labelled as an argument because it was an unofficial decision.
With time, things only got worse. By the times of Hillel and Shamai (circa 50 B.C.E.), just four generations after the first dispute, another three arguments evolved[vi] and there was no stabilized High Court to resolve the issues. Until later generations when the arguments would finally get a unified decision, every province would follow the guidance of their local rabbi (similar to every state in the United States being under their local government).[vii]
There were as well unofficial decisions that were to be temporarily followed. Nowadays as well we follow the following principles. If, say, the argument is regarding monetary matters, then we would generally leave the money in the possession of its holder (the defendant), for until the accuser finds proof for his case, he has no rights to withdraw it from its current possessor. Similarly, in cases involving the death penalty or lashes, we don’t execute the ruling unless there’s a unified decision on the matter in positive. [Being that we are under foreign rule, the biblical law of Capital Punishment and lashes are not executed nowadays.] In cases of personal obligations (not civil disputes or matters involving the High Court) which encounter arguments on its details, the rabbis encourage the masses to follow the stricter opinion to be “on the safe side.” This principle has exceptions such as in cases of not such fundamental rabbinic laws. These are all practical ways to do away with the arguments that are still pending a High Court decision.
The trend continued and multiplied by the next generation which suffered from the destruction of the Temple, Jerusalem, and the Land in general. As the Talmud records,[viii] the sages would gather on only rare occasions. As a result, within one generation dozens of new arguments arose, and again, there was no stable High Court to decide on the matters. The effects of the destruction and the proceeding years of trouble resulted in a decline in scholarship[ix] as the sages were often fleeing from place to place in attempt to evade religious persecution by the Roman government.[x]
In the first-century A.C.E. writers begin mentioning the Oral Law or “Traditions of the Fathers.” The first of such mentions are in Josephus and the New Testament writings.[xi] Josephus makes it clear that many of these Oral Laws are traced to Sinai and that it was the belief of the dominating Pharisee sector in both Judea and the Diaspora. There were very few Jewish documents that we have today that precede the first-century A.C.E., which explains why we need to wait until the first-century writings for mention of the Oral Law. Additionally, there is no context in the short documents that we have preceding the first-century that should be expected to remark the existence of the Oral Law.
Before proceeding with the history of the transmission of the Oral Law, we will divert briefly to discuss the upcoming issue:
Overview: As part of putting the Oral Law into historical context, we will now explain why all arguments recorded in the Talmud are linked exclusively to the Tanna’ic and Ammora’ic eras, while no arguments are associated with the earlier generations.
Based on the above, we should expect to only see arguments in the Mishnaic and Talmudic era involving rare cases that would develop only in their times. We should not, however, find disputes on frequent practices and basic issues that seemingly should have been resolved earlier. But this is not the case and we shall now explain why.
Here are a few reasons that could have generated the arguments on some basic religious issues only in later times:
(1) Many laws in the early generations were practiced in one manner, not because of Halachic mandatory reasons, but simply because it was the frequent practice. This would be until a sage comes and decides to argue using logic or the traditional derivation tools discussed earlier. The sages would then officially discuss the topic for the very first time.
(2) As mentioned earlier, a later generation may argue on the previous ones, although it generally refrained from doing so. When such arguments would arise in the early generations, it would immediately be resolved in the High Court. In the Mishnaic and Talmudic times, however, it became impossible to rule on the newly arising arguments, as explained earlier.
(3) The early generations wouldn’t pay heed to many of the details that later generations decided to put emphasis on. It is similar to early governments which begin with more basic laws that later evolve into increasingly complex details etc. For instance, an argument arose in the times of the academy of Hillel and Shamai whether or not the reciting of Shema must be done seated or if lying in bed while reciting the Shema is also permitted.[xii] Even though this is a common day-to-day practice, the early generations didn’t put heed into this trivial detail of the Law and would do it either this way or that way. By the times of the academy of Hillel and Shamai, however, a scholar raised this question and brought a source of reasoning (either logical or derivational) to prohibit lying while reciting the Shema; another scholar disagreed, and again there is no High Court to rule…
(4) Frequently, arguments would arise thanks to breaches in the tradition (specifically as a result of the destruction of the Temple) where we would forget rulings of previous High Courts. Of course, this wouldn’t rarely happen to the commonly practiced laws.
The above explanations answer the famous question how it was possible for eleventh-century rabbis Rashi and Rabeinu Tam to argue about the order of scrolls in the Tefillin—a practice done every day by all Jewish males. The question is how such a basic concept could have been forgotten or argued upon if we can simply inquire of the earlier generation how to perform it. The above explanations answer this nicely. In fact, archaeology discoveries actually support this idea. Amongst the Dead Sea Scrolls, pairs of Tefillin were found. Surprisingly, both types of Tefillin were found, the ones of Rashi and those of Rabeinu Tam.[xiii]
Supporting this idea is the fact that we will almost never find an argument on the basic interpretation of Torah; it is only on the details or rabbinic laws that we find disputes. There aren’t any arguments on the biblical laws such as the meaning of “taking a nice fruit” (Leviticus 23:40), for all agree that it’s an Esrog fruit. If the Mishnaic or Talmudic rabbis were making up laws from scratch, there should have been arguments on that as well. Similarly, all agree on the definition of “inflicting pain” on Yom Kippur and the 39 general categories of work on Shabbos. It is only on the details of these that many arguments befall.[xiv]
Back to our discussion on the history of the Oral Law:
About four generations after the destruction of the Second Temple, the greatest scholar at the time and leader of his generation[xv] changed the course of rabbinic history. A direct descendant of the authoritative Hillel dynasty, his name was Yehudah Hanassi. After about 100 years of chaos in the Land, having a profound effect on the preservation of the Oral Law, he decided to take action. He determined that although it was generally prohibited to write the Oral Law traditions up until that point as directed at Sinai, it was now necessary.[xvi] At the rate things were going, the entire Oral Law was bound to be forgotten. Better it be written than it be lost. So, he took upon himself the daring task of writing the Oral Law in a proper orderly fashion. With his great brilliance, he succeeded in writing the greatest masterpiece in all rabbinic literature.[xvii]
His foundations were the basic scripts put together by the Men of the Great Assembly, as mentioned earlier. Added to those scripts, were the arguments and rulings that developed ever since those years, over a span of almost seven hundred years.[xviii] It is highly likely that he also used some of the many private personal notes he collected of earlier generations, mentioned above, and selected the most reliable and accurate of them while editing some if necessary.
For the first time in history it became permitted to publicize this documentation of the Oral Law, called the Mishnah. His work was immediately accepted by the entire rabbinic authority and all of Israel,[xix] and no one from the religious community argues on it until this day. This Mishnah’s text was written very briefly, precisely, and in riddle-like form (more on this later).
Although Rabbi Yehudah Hanassi taught his intent (i.e. the meaning of the Mishnah) to his disciples, after a few generations into exile much began to fade from memory. This formed much work for the Talmudic sages. The rabbis debated and concluded interpretations on the Mishnah, through analyzing its precise text. The bottom-lines and much of the debates (more on this later) are written in the Talmud, the most prominent Oral Law series in rabbinic Law and Judaism.
Although the Talmud was much clearer than the Mishnah, it too became the focus of much dialogue in later generations with many opinions on its interpretations and reasoning. Although there hasn’t been a High Court since to determine the rulings in cases of dispute, we follow the majority of sages.
Eventually the Shulchan Aruch, the Code of Jewish Law, was written and was unanimously embraced by the entire Jewish community until the present times. There are some Halachic cases that until this day weren’t formally ruled upon and different Jewish communities differ in practice. However, it is only on the trivial details that there can be differences of practice in our times; never will there be differences in significant biblical or rabbinic laws.
On a side point, there were many legislations passed by the rabbis throughout the generations for reasons that are currently outdated. Yet we still keep many of these expired laws. Why is that so?
(1) It gives us the sense of respect for tradition, a non-changing everlasting religion. There were those who started-off just by abandoning the “expired” laws, and it only led to a sense of “religious freedom” and an undisciplined mindset. This includes Reform, Conservative, and other liberal Jewish movements, which went so far from Judaism that they now suffer from major assimilation into the non-Jewish population.
(2) Besides for the reasons actually mentioned in the rabbinic literature, there were occasionally additional reasons behind a specific legislation. Those reasons can still apply today. The reason why the early rabbinic literature didn’t mention that reason, is perhaps because it was a secondary reason that wasn’t necessary (to be mentioned) in their times.
(3) It is in respect of the early rabbis who legislated them that contemporary rabbis are “scared to mess with.” For example, if you knew of a legislation that Moses himself or Isaiah the Prophet ruled, would you have the audacity to outlaw it due to circumstantial changes?!
But many of the laws were indeed abolished, depending on various factors beyond the scope of this work.
On another side-note, besides for all of these human characteristics of the rabbis as we are describing them until now, many of them possessed what we call ruach hakodesh, or Divine Spirit. It is basically a sort of rare divine wisdom that comes to them, not based on logic or tradition, but is a sort of spiritual vision. However, this Divine Spirit was under no circumstances ever able to interfere with Halachic matters. That is because the Halacha authority was given to the human mind only. This Divine Spirit was a way G-d shared some information with us throughout the generations—information outside of Halacha. Many Orthodox Jews take the concept of ruach hakodesh well out of proportion then what it actually is and the way it is described.
 Maimonides, in his work of Mishneh Torah Hilchot Mamrim 2:1-2 explains us when the sages were permitted to argue on a previous generation’s ruling and when not. If the ruling was based on the derivation tools, then they may argue. If, however, it was a decree by the previous generation (that was successful and spread throughout the Jewish communities), then they (generally) cannot abolish it unless they are greater in both wisdom and number than the previous court.
 Many Orthodox Jews would add over here the concept of yeridas hadoros, that the intellect of the early sages surpassed that of later sages. Therefore their rulings were usually not disputed by the High Court in later generations. However, there isn’t much support to this idea that yeridas hadoros, a term coined in Kabbalah but a concept alluded to in the Talmud, is concerning intellect. The true concept of yeridas hadoros is one beyond our discussion at hand. For a discussion of yeridas hadoros and the evolution of intellect, see http://booksnthoughts.com/must-jews-today-obey-ancient-rabbis-because-they-are-not-as-smart-as-they-were/
 It is clear from all the Prophets that paganism was widespread during the First Temple Era.
 For example, because of the mass-violation of Shabbos (mentioned in Nehemiah Ch. 14), many of today’s Shabbos institutions were established. The idea was to create a meaningful day, not just one which prohibits most activities. These institutions include the iconic Kiddush, Havdalah, family meals, and Shabbat Candles.
 It is unclear what exactly happened. On the one hand it is known from the Talmud that Rabbi Judah HaNassi composed the Mishnah. Yet it is clear from many Mishanhs (e.g. Shabbos 66b and Bava Kamma 94a-b) that there was an earlier script that was being cited and expounded upon.
 The Sadducees were a sect who only believed in the Written Law. They had secular tendencies albeit strictly observant in specific areas of the Law. They were in constant political and ideological battle with the Pharisee sages and would often stimulate trouble to Pharisees with their political connections to the secular-inclined governments.
 It depended on many different factors and circumstances (there are also many opinions of medieval and modern rabbinic works on this matter).
 In fact, there’s an entire tractate in the Talmud that reveals the extent of the sages’ struggle to remember much of the Law. [Memory here doesn’t only mean literally memory of the brain. It also means that there was a very week transmission from the generation before to that generation which is why they would frequently rely on a single scholar for a ruling from the previous generation.]
 As described earlier, it is clear that the “Sinaic oral laws” were not to be written but there is uncertainty in regard to the “rabbinic oral laws.”
 Meaning, originally there may have been a few arguments on some fundamental practical performances of the Mitzvos. But nowadays, we all accept one of the opinions and don’t just leave it for every community to decide.
 For example, the Haftarah services that follow the reading of the Torah on Shabbos, is a custom that began, according to tradition, at a time when reading from the Torah was prohibited by the occupying authorities. The rabbis used chapters from the Prophets to substitute the Torah readings. The authorities looked at the Prophets-reading (Haftarah) as story-telling time and not religious instructions and therefore permitted it.
[i] Rambam Hilchos Mamrim 1:4, Talmud Sanhedrin 88b.
[ii] Rambam in his introduction to the Mishnayos chapter 4. Also all throughout the Talmud we find enactments attributed to Ezra and his collogues.
[iii] The fact that the Mishnayos was a build-up throughout generations can be seen from various Mishnayos, e.g. Shabbos 66b and Bava Kamma 94a-b. For the discussion of who were the early Sages to compose the script see Doros Harishonim to R’ Yitzchok Issac Halevi and Yesod Hamishnah VeArichoseha to Revuven Margolious.
[v] Talmud Shabbos 15a, Chaggigah 16a in the Mishnah.
[vi] Talmud Shabbos 15a.
[vii] See Talmud Shabbos 130a regarding the townspeople of Rabbi Yossi ben HaGelili who would follow his decision on the issue of whether or not we should deem chicken’s meat to be prohibited consumption with dairy.
[viii] See e.g. Shabbos 13a.
[ix] Rambam in his introduction to the Mishnayos chapter 4. Talmud Sanhedrin 88b. See tractate Ediyus for many arguments of theirs.
[x] Rosh Hashanah 31a.
[xi] E.g. Josephus Antiquities XIII 297, Mathew 15:1-20, Mark 7:1-13.
[xii] Talmud Berachos 10b.
[xiii] http://www.myjewishlearning.com/article/rashi-and-rabbenu-tam-two-sets-of-tefillin/, http://thetorah.com/what-will-the-newly-found-tefillin-scrolls-reveal/, http://www.aish.com/atr/Rabbeinu-Tam-Tefillin.html
[xiv] Rambam in his introduction to the Mishnayos chapter 4.
[xv] See Rambam in his introduction to the Mishnayos chapter 3, Kesubos 103a-b, 104a, Sotah 49a, Rosh Hashanah 26b, and many more sources.
[xvi] See Igeres Rabbi Sherirah Gaon (Levin print) pages 20, 21 and 31, R”N Gaon in his Hakdamah to Sefer Hamaphteach. Also see Rambam in his Hakdamah to his Yad Hachazakah.
[xvii] Talmud Yerushalmi Peah 2:4.
[xviii] See Talmud Yerushalmi Horiyus 3:5, Talmud Bava Metzia 86a and Rashi there on the headline Sof Mishanh, Bava Metzia 33b and in Rashi there on the headline Bimei Rebbi.
[xix] See Talmud Yerushalmi Maaser Sheni 5:1.