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From the New Testament, we learn that Jesus’s favorite mode of teaching was through fiction; he taught parables. Although the characters and events may not be historical, few Christians question the truth in the messages.
Despite comfort with parables, some Christians become unsettled thinking about elements of the Bible as being non-historical. Biblical scholar Ben Spackman points out that this hesitancy is inherited from Enlightenment thinking, which regarded revelation as truth and truth as scientific or historical fact. This thinking, Ben points out, causes many readers to jettison common sense and plain readings of scriptural text.
Often times when reading scripture, the assumption is made that the text is either literal or figurative, but these two categories are insufficient to describe the different genres of scriptures.
It would be more helpful to approach the Bible as if it were a library that contained books of many different genre instead of being all the same type of writing. No Christian would presume to label all scripture as parable. Likewise all scripture should not be labeled as history. The Bible contains books of satire, law codes, poetry, parables, myth, conquest narratives, and prophetic revelation among other things.
The type of “thing” or genre of a given book is indicated by genre markers. For instance, Americans can tell a book is a fairy tale if it begins with “Once upon a time.” Genre markers in the Bible can be identified similarly by biblical scholars familiar with the culture.
Readers should also keep in mind that ancient Israelites approached the use of history in scripture differently than modern authors. Historical accuracy is actually a modern concept. Biblical writers often fashioned history to teach a higher purpose. If some of the historical details were fudged, then that was regarded as acceptable if done to make a point.
Check out the resources referenced in the podcast at LDS Perspectives.