"... and Moshe sat to judge the nation and they stood before Moshe from the morning until the evening" - Yitro sees how Moshe is judging the nation, one at a time, and he cannot understand why Moshe is doing it so inefficiently. "This is not good, what you are doing. You and the nation will be exhausted…Let me give you a good piece of advice." And Yitro goes on to outline a system of go-betweens between Moshe and the nation, "officers of a thousand, of one hundred, of fifty and of ten. And they will judge the nation at all times, and the important matters they will bring to you and they will judge the less important matters." This is a revolutionary idea. One must wonder why Moshe did not think of it himself. Truly, this is not the first time we encounter something Moshe should have thought of, but did not. When he left his father-in-law's house with his family to go down to Egypt, he met Aharon on the way. Aharon asks him, "Who are these with you?" Moshe answered, "This is my wife whom I married in Midyan, and these are my children." Aharon asked, "And where are you bringing them?" Moshe answered, "To Egypt." Aharon responded, "We are upset about the ones who are there already and you want to add to them?" And Moshe sent them back to her father's house. In my humble opinion, it is not that Moshe made a wrong decision. It is that he was waiting for The Voice to come and tell him to do otherwise, and It did not come. So he continued to do what he was doing. Along came Yitro with an idea that occurred to him in reaction to what he saw, and he sought to implement changes for the benefit of Moshe and the nation.
Implementing changes was a revolutionary idea. We have not yet really encountered people thinking things up for themselves. Rashi brings from Tractate Shabbos "One who judges truthfully for even one hour it is considered as if he were a partner with Hashem in the act of creation." Moshe at that time seemed to be Hashem's sole partner in creation. Yitro came along and by the power of his own mind set the example for people using their own minds. His new system called for adding 78,600 new partners in creation (of which, if you add up the digits, you'll find an interesting result vihameivin yavin). And Yitro finished his suggestion with "If you will do thusly, and Elokim so commands you…" Yitro leaves it up to Moshe's reason first, and if Moshe finds it reasonable, then he should run it by Hashem and make sure its OK. Moshe implements Yitro's plan with one slight change - Yitro suggests all important things be brought before Moshe. Moshe implements that the difficult things be brought before him. Full responsibility is placed upon the new judges, and they are fully trusted to deal with any matter, no matter how much money is involved, which they are capable of judging. How is man a partner in creation? The Ba'al Ha'Tanya brings down the verse from Proverbs "Her husband is known at the gates, in his sitting with the elders of the land." We are able to attain knowledge of Hashem through His descending to dwell among the elders of the land, those who have come to possess wisdom. That is to say, Hashem through His Torah has allowed His Wisdom to be known by flesh and blood. Through knowing Wisdom we can know Hashem's will as it is enclothed in Torah. Wisdom is one of the places where man can "overlap" with Hashem on some level. Thus the judges Moshe appointed at Yitro's suggestion, carriers of Wisdom, became partners in creation. The system that Yitro helps Moshe set up is not the final goal. It is not the Torah. Rather it is a vessel through which the Torah's Wisdom can be the guiding force in the daily lives of Yisrael. The Wisdom of Torah is not the same as "logic" - logic, too, is a structure without content. We might, and probably do, share the same rules of logic, i.e. not to accept that which contradicts something we hold as true, a=b b=c a=c. etc. But we most certainly have different substances, oils, which flow through our logic systems. For example, you believe in G-d and I do not. If I believed in G-d I would then accept the "logical" extrapolations of that foundation. We stood at Sinai to receive the new foundation of our logic. "I am Hashem your G-d, who took you out of Egypt. This is my Torah." With this basis, there is a whole new system of "logical" results - there is One G-d, that One G-d created me and my mind and is therefore beyond the grasp of my mind, that One G-d has a Will which He wants me to do. There are others - the Rambam says it is upon us to go "beyond the letter of the law." We will seek to judge favorably. That becomes the rule, not an option. There is more - na'ase v'nishma - we will do first and hear the reason later. This is the rule now; we do not proudly place our own wisdom and logic as the final voice in decision-making. We plug these new rules into our well-oiled Yitro-designed machine so that the will of Hashem can flow through the world.
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From the Zohar - "and Moshe went up into the cloud" - which cloud was this? The one containing the Rainbow, as it says by Noach, "I have set my bow in the cloud." And the rainbow removed Her garments and gave them to Moshe. And Moshe donned them, and went up and gazed upon the All.
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"And Yitro heard all that Hashem had done" - The Ohr HaChayim brings down that the Torah praises Yitro who sought to know all the details of what Hashem had done, for this is love.