The Chaldeans, following standard Mesopotamian practice, deported the Jews after they had conquered Jerusalem in 597 BC. The deportations were large, but certainly didn't involve the entire nation. Somewhere around 10,000 people were forced to relocate to the city of Babylon, the capital of the Chaldean empire. In 586 BC, Judah itself ceased to be an independent kingdom, and the earlier deportees found themselves without a homeland, without a state, and without a nation. This period, which actually begins in 597 but is traditionally dated at 586, is called the Exile in Jewish history; it ends with an accident in 538 when the Persians overthrow the Chaldeans.
Nebuchadnezzar, the king of the Chaldeans, only deported the most prominent citizens of Judah: professionals, priests, craftsmen, and the wealthy. The "people of the land" (am-hares ) were allowed to stay. So Jewish history, then, has two poles during the exile: the Jew in Babylon and the Jews who remain in Judah. We know almost nothing of the Jews in Judah after 586. Judah seems to have been wracked by famine, according the biblical book, Lamentations, which was written in Jerusalem during the exile. The entire situation seemed to be one of infinite despair. Some people were better off; when Nebuchadnezzar deported the wealthy citizens, he redistributed the land among the poor. So some people were better off. In addition, there were rivalries between the two groups of Jews. It is clear that the wealthy and professional Jews in Babylon regarded themselves as the true Jewish people.
The salient feature of the exile, however, was that the Jews were settled in a single place by Nebuchadnezzar. While the Assyrian deportation of Israelites in 722 BC resulted in the complete disappearance of the Israelites, the deported Jews formed their own community in Babylon and retained their religion, practices, and philosophies. Some, it would seem, adopted the Chaldean religion (for they name their offspring after Chaldean gods), but for the most part, the community remained united in its common faith in Yahweh.
They called themselves the "gola," ("exiles"), or the "bene gola" ("the children of the exiles"), and within the crucible of despair and hopelessness, they forged a new national identity and a new religion. The exile was unexplainable; Hebrew history was built on the promise of Yahweh to protect the Hebrews and use them for his purposes in human history. Their defeat and the loss of the land promised to them by Yahweh seemed to imply that their faith in this promise was misplaced. This crisis, a form of cognitive dissonance (when your view of reality and reality itself do not match one another), can precipitate the most profound despair or the most profound reworking of a world view. For the Jews in Babylon, it did both.
From texts such as Lamentations , which was probably written in Jerusalem, and Job, written after the exile, as well as many of the Psalms, Hebrew literature takes on a despairing quality. The subject of Job is human suffering itself. Undeserving of suffering, Job, an upright man, is made to suffer the worst series of calamities possible because of an arbitrary test. When he finally despairs that there is no cosmic justice, the only answer he receives is that humans shouldn't question God's will. Many of the psalms written in this period betray an equal hopelessness.
But the Jews in Babylon also creatively remade themselves and their world view. In particular, they blamed the disaster of the Exile on their own impurity. They had betrayed Yahweh and allowed the Mosaic laws and cultic practices to become corrupt; the Babylonian Exile was proof of Yahweh's displeasure. During this period, Jewish leaders no longer spoke about a theology of judgment, but a theology of salvation. In texts such as Ezekiel and Isaiah, there is talk that the Israelites would be gathered together once more, their society and religion purified, and the unified Davidic kingdom be re-established.
So this period is marked by a resurgence in Jewish tradition, as the exiles looked back to their Mosaic origins in an effort to revive their original religion. It is most likely that the Torah took its final shape during this period or shortly afterward, and that it became the central text of the Jewish faith at this time as well. This fervent revival of religious tradition was aided by another accident in history: when Cyrus the Persian conquered Mesopotamia, he allowed the Jews to return home. This was no ordinary event, though. Cyrus sent them home specifically to worship Yahweh—what was once only a kingdom would become a nation of Yahweh.
Sources: The Hebrews: A Learning Module from Washington State University, ©Richard Hooker, reprinted by permission.