It appears that redaction criticism can be viewed either positively or negatively by proponents of a grammatical-historical hermeneutic (see this article)? What are the primary arguments for and against the two approaches being compatible?
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The historical-grammatical method attempts to re-discover the original meaning of a text as intended by its author. It's "historical" because it tries to place the text in historical context and it's "grammatical" because it closely analyses the grammar of the text to determine meaning. Implicitly, the method assumes the received text is the same or very close to the text produced by the original author. (However, most commentators are open to insights provided by textual criticism to help find the best text based on analysis of numerous extant manuscripts.)
Redaction criticism on the other hand, attempts to identify and understand editorial decisions embedded in the text. Related disciplines include source criticism, which attempts to identify written sources, and form criticism, which attempts to identify the context of sources before they were written down. Together these methods are called historical criticism.
With those definitions, it should be possible to see how the two approaches could be compatible. For texts that are clearly edited from older sources, such as Genesis, we need redaction criticism to be able to place the text in the context needed to use the historical-grammatical method. If we can determine the author of Genesis 2 knew about Genesis 1, we must interpret the text differently than if both texts were written independently of each other. Teasing out the editorial process of the individual gospels has radically altered our approach to reading them. (Mark has become vastly more important in the process.)
The incompatibility comes when, in my opinion, historical criticism oversteps its bounds or tries to assert more than it is able. For instance, Paul leaves us an intriguing puzzle in 2nd Corinthians 2:3-4 and 7:8 when he refers to a previous sorrowful letter. One solution to the problem might be that a helpful editor included the letter in 2nd Corinthians 10-13. But Normann Perrin divides the letter into 5 Pauline fragments and one interpolation. That seems highly speculative.
It turns out the historical-grammatical method converges on a narrow set of interpretations while historical criticism tends to diverge.1 The problem as I see it stems from the limited number of editorial decisions that can truly be discovered in the current form of Biblical text. After the Synoptic problem was solved, the range of texts needing redaction criticism has dropped to a trickle. The number of texts that can be interpreted via various historical-critical techniques turns out to be very small because the texts were transmitted as whole books rather than shorter chunks. In order for scholars to make novel proposals, more radical interpretations must be offered. Since the content of the text can be sidestepped by proposing a new view of the history of its composition, new theories need not conform to the text at all.