Deuteronomy's legal treatment of slavery is more humane than the parallel laws in Exodus, and more practical than those in Leviticus.
Leviticus is very clear: There is no such thing as an Israelite slave.
Why These Differences?
Deuteronomy, it would seem, is more humane than Exodus but less humane than Leviticus. Deuteronomy, for instance, states that the owner should give provisions to the freed servant, whereas Exodus does not have anything about this. In Deuteronomy, however, there is such a thing as the permanent bondage of an Israelite. Deuteronomy does not seem to have the same anti-slavery ideal as Leviticus.
This is not the moral trajectory that we would prefer. We would rather have Deuteronomy, the later text, as the more abolitionist text.
[Biblical scholar] Sara Japhet shares our concern [in an article in Scripta Hierosolymitana Studies in Bible] that Deuteronomy seems to be a step backwards from Leviticus. She wonders "...what might have prompted Deuteronomy, with its emphasized humane tendencies, to retain permanent bondage." Japhet explains that Deuteronomy is more realistic about life and society, that it takes "into account the exigencies of real life."
[Another scholar] Jeffrey Tigay. makes the crucial point that while Exodus and Deuteronomy require the manumission of servants after six years of service, Leviticus only requires the release of slaves in the Jubilee, the 50th year. Why would Leviticus not have the system of seven-year cycles?
Leviticus seems to care less about the individual than the family. At the end of the 50 years, the family would go free. The descendants of the individual would benefit and would regain their property. Leviticus is concerned that the clan's land should be returned to the clan. This is why a kinsman of the man in debt is allowed to buy the land earlier than the Jubilee.
From Tribal to National
In these texts, we see the move from tribal to national consciousness. The Book of the Covenant in Exodus 21-23 reflects a tribal society. Leviticus is still concerned about the family. By the time of Deuteronomy, the nation-state has replaced the family/clan/tribe as the key entity.
To review the outline of Israelite history: David and Solomon changed the tribal inheritances into federal districts, the northern tribes split into a second kingdom, many from those northern tribes were transplanted to Assyria. What was left, at least according to biblical history, was the kingdom of Judah.
What we need to understand in this context is that these events created a profound change that is reflected in the laws of Deuteronomy. This text asks: "Now that all Israelites are responsible for one another, now that we have seen our co-religionists and co-Israelites taken off to a foreign land, how will we respond? How will we keep the nation and the people intact and alive? How do we deal with the issue of slavery?"
Leviticus seems to be more humane than Deuteronomy, but in fact it is not. Following Tigay, Deuteronomy is the more humane text. The main issue is not status but time. Fifty years, to emphasize the obvious, is a very long time. If one becomes a slave at the beginning of the cycle as an adult, he would be a slave for the rest of his life. Six years as a hired laborer is manageable; 49 years is not.
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