Chapter 4 discusses matters of most direct concern to biblical scholars (as such). It contains a wealth of material to bring non-specialists (like me) more up to date on Hebrew and other North West Semitic epigraphy from the Iron age.

The Mesad Hashavyahu ostracon presents a field worker's complaint in writing about the confiscation of his cloak. Tracing image from Wikimedia.
There are continually intriguing glimpses of this ancient world and its adopting, and adapting, of a different communications technology. One of the both at the same time most, and also least, surprising details are the parallels between ancient Greek adoption of the alphabet, where early literacy concerned exclusively drinking, dance and sex, and the early adoption of the Internet ;) Noticing this has a serious outcome, to demonstrate that alphabetic literacy did not need scribal schools to flourish. Likewise digital literacy in our day owes little if anything to the formal education system (beyond the basic “learning to read”). This suggests that the lack of evidence of Iron Age scribal schools in Palestine is not sufficient evidence for lack of literacy. Indeed texts like Lashish 3, in which a military commander resents his superior’s asssumption that he may not be able to read and write himself, and the Mesad Hashavyahu ostracon which, although we assume it was not written by the field worker, demonstrates his access to and use of the medium.
This chapter contains fascinating information, and also intriguing claims these are often closely argued. For example the important section which seeks to show deliberate standardisation of Hebrew script in the eighth to sixth centuries, and that this standardised system both crossed the boundaries of the (expected on the basis of biblical accounts) northern and southern kingdoms but also stopped at their boundaries. There are however somtimes annoying jumps in the argument, so although Sanders aims to base his discussion on the epigraphic evidence rather than on the accounts in the biblical texts (where our earliest copies come from a long time after the period being discussed, so offering questionable evidence) he seems to assume two Hebrew kingdoms, rather than discover them. Likewise on p.124:
If written Aramaic and Moabite were created in competition with an emerging standard form of Hebrew, then they re indirect evidence for the invention of written Hebrew in the late ninth century.
I think the argument is circular, since I do not remember evidence being presented to suggest that these other script/languages were indeed created “in competition” with Hebrew. So, for example the Mesha inscription predates the examples of “Standardized Hebrew”.
For me one of the most interesting aspects of this chapter was the focus on prophetic texts, and on the light epigraphic evidence throws on the possible processes of composition and transmission of such texts. Here both the Deir’ Alla inscription, Hebrew ostraca and the Bronze Age materials from Mari are all woven into a coherent account of how such written prophecy worked among West Semitic peoples, and how this written prophecy changed over time. This is really exciting!
When talking about biblical prophecy (in particular Isaiah 10:5-15) he takes Machinist’s interpretation of the passage as a neat reversal of Assyrian royal propaganda, and includes the evocative phrase: “a new double speaker: the prophet and the god he ventriloquizes” which both expresses the idea and provokes further thought about what is being said. This is typical of flashes if insight communicated in vivid language that are found everywhere and enliven what risks becoming a sometimes technical discussion.
He argues that texts like this, from Isaiah, depend upon the langauage and genres of Neo-Assyrian royal propaganda, and that such propaganda was lost with the rise of Babylon replacing Nineveh as the imperial centre (a claim I would have liked to see backed by evidence). If that is so then these biblical texts must originate from an Assyrian dominated historical context, and not a later one.
One of the key points of this chapter, could have done with being brought more sharply into focus, and discussed at greater length. For the claim that invention of Hebrew was intimately bound up with the invention (or recognition) of a responsive (and in some ways authoritative?) audience, a “you” addressed by the texts, is highly significant for understanding the texts handed to us as Bible. This is also important because this claim is central to demonstrating the thesis of the chapter. From signs like this I get the impression that a bigger, less easy to read, monograph stands somewhere behind the book I am reading. Perhaps rather these more detailed arguments are made in Sanders work published in more specialised places.