To venture one more clarification of my approach, I agree wholeheartedly with the comment of Fraenkel that stories in Talmudic literature were not testimony to what took place, but a reworking of material (which once might have recounted events in the past) that was serving the educational and/or ideological objectives of the story-tellers. What is crucial is what we understand these ideological and educational objectives to have been. I would argue that at least sometimes they included attempts to make sense of the collective memory. Those stories engaged in the effort of understanding what was known, invented or imagined concerning the past are proper grist for the historian’s mill. While they were not history, the issues around which they were built are not alien to history. The questions they were trying to answer are, in fact, very close to a historian’s questions, and they may therefore be able to help in our efforts to write history. They can teach us something about the world outlook of the various story-tellers all along the chain of transmission, as well as, perhaps, about the original event (whether remembered, imagined or invented) itself.
Albert I. Baumgarten, “Rabbinic Literature as a Source for the History of Jewish Sectarianism in the Second Temple”, Dead Sea Discoveries, Vol. 2, No. 1 (April 1995), 34-35.