I recommend reading David Noel Freedman's preface to the scholarly book, Chiasmus in Antiquity, edited by John Welch. The full text of that intriguing book is available free online at the Maxwell Institute. Here is part of what Dr. Freedman has to say:
The more extended uses of chiasm raise further questions. As with much of literature, especially poetry, ambiguity and obscurity are inherent in the form and content: chiasm only adds to the uncertainty and mystery. Scholars now recognize chiasms beyond the simple type described above, chiasms which involve passages of verse or prose ranging in length from a few sentences to hundreds of thousands of words. This more complex form of chiasm is not merely grammatical but structural or intentional; it systematically serves to concentrate the reader's or hearer's interest on the central expression. The number of such chiastic constructions which satisfy both sets of criteria: inversion and balance on the one hand, and climactic centrality on the other, is substantially less than the simpler mechanical variety. But wherever they are present, these structures may add novel perspectives and unexpected dimension to the texts in which they appear.

There is yet a further extension of the term chiasm. Even more difficult and controversial issues arise when chiasm is defined in terms of thought and theme, rather than the more visible words and patterns. Inevitably a large subjective element enters into these discussions, and the presence or absence of chiasm on this level can become almost a voter's choice.

Scholars, therefore, may range between separated areas of research in their approach to chiasm. On the one extreme, the phenomenon itself can be described or defined rigorously, so that it is verifiable and often self-evident; while in this sense it is part of a deliberate pattern of composition, it nevertheless leaves the wider world of symbolism and significance to others. At the other end of the spectrum, definitions and limits are hard to determine, and speculation is rife; but large issues of meaning and intention can be raised, and important questions about the nature and significance of extended literary pieces are considered. The study of these great chiasms has enormous implications for analysis and interpretation, but the wider the scope and the more extended the reach, the less certain the results necessarily become. In the end, neither approach will escape if carried to extremes.

Only a book with many varieties of presentation can display the present state of chiastic studies. While a great deal of important work has been done across the many domains of ancient literature, the study of ancient literary techniques is still in ferment and flux. A common fund of axioms and assumptions and a single sure-handed methodology are yet to be established. The present volume reflects accurately both the ferment and the progress which is being made on a variety of fronts, and is all the more to be welcomed for bringing together the results of research in different literatures of antiquity. The editor is to be commended for his catholicity and courage, and for his own original contributions in several domains including a unique treatment of the Book of Mormon. His introduction to the whole work is indispensable. [emphasis added]

--David Noel Freedman
Dr. Freedman has been called one of the world's foremost scholars on the Bible. You can also read about him on Wikipedia. He passed away in 2008.

Of course, scholars aren't exactly lining up to be baptized as Mormons because John Welch found some cool chiastic passages in his unique treatment of the Book of Mormon. But once Mormonism becomes more helpful in obtaining tenure, perhaps that will change quickly. ;)

You may also enjoy another useful resource I just found on the importance of chiasmus in the Bible by Brad McCoy, "Chiasmus: An Important Structural Device Commonly Found in Biblical Literature" (PDF). Brad is a pastor with a Ph.D. in Biblical Studies from Trinity Theological Seminary (and no, he does not mention the Book of Mormon in his article, though he does cite Welch's book on chiasmus).

Chiasmus can be found in some degree almost anywhere and is found in many languages and literatures. As Freedman observes, sometimes it can be contrived by the reader and not really intended or consciously used as a literary device. Other uses can be rather trivial even if deliberate. This is where we get into the issue of the degree of chiasticity introduced by Welch ("Criteria for Identifying and Evaluating the Presence of Chiasmus," 1995), including various indicators to help us determine if the structure is deliberate, meaningful, and probably intended. There are many weak examples that enthusiasts for the Book of Mormon, the Bible, and other texts have found, but there are some real gems that should raise eyebrows, as I discuss on my page about chiasmus in the Book of Mormon. See also Boyd F. Edwards and W. Farrell Edwards, "Does Chiasmus Appear in the Book of Mormon by Chance?," BYU Studies, Vol. 43, no. 2, pp. 103-130 (2004).

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