Question: "Isn't it a misuse of Lazarus and the rich man to teach the state of the dead since it's just a parable to teach people how to live and since there's far more evidence in other Bible passages that the dead know nothing and are asleep until the resurrection?"
Answer: There can be no doubt that the story of Lazarus and the rich man pictures those who die as still being conscious. In Luke 16.22-24, Lazarus died and was carried to Abraham's bosom where he was comforted, implying consciousness, while the rich man died and lifted up his eyes in torments, also implying consciousness. The rich man recognized both Lazarus and Abraham, and they were able to communicate. The question is, does this represent reality after death or not? Actually, there is a debate as to whether this is even a parable or rather a true story. But even if it is a parable to teach us how to live, would Jesus have told us how to live by giving false information about the state of the dead? The truth is that even in Jesus' parables He always represented reality.
Yes, there are passages which speak of the dead as being asleep. In 1 Thessalonians 4.14, Paul wrote of the general resurrection at the end of time, saying, "For if we believe that Jesus died and rose from the dead, even so God will bring with Him those who sleep in Jesus." However, there is every reason to believe that this is simply a figure of speech which refers to the fact that the body of a dead person appears as if it is asleep. So neither this passage nor any other which speaks of the dead as being asleep teaches the doctrine of "soul-sleeping."
While it is true that the body is spoken of as being asleep in death, there is absolutely no passage which ever speaks of the soul or spirit being asleep or unconscious. Physical death takes place when the body and soul or spirit are separated (James 2.26). The body dies and returns to the dust of the ground where it "sleeps" until the resurrection, while the soul or spirit returns to the control of God who gave it (Ecclesiastes 12.7). While it is there, the Bible teaches that the soul continues to be conscious.
The fact is that there is much more Bible evidence that the souls or spirits of those who have died are still alive in the sense that they are conscious. The Saducees of Jesus' day also did not believe that the soul survived after death in a conscious state. In Matthew 22.32 Jesus responded to one of their arguments by quoting a statement made by God and adding His own conclusion, saying, "'I am the God of Abraham, the God of Isaac, and the God of Jacob.' God is not the God of the dead, but of the living."
Abraham, Isaac, and Jacob had all been dead for many years when God made the quoted statement to Moses (Exodus 3.6). Yet God spoke of them in the present--"I AM the God of" each one. Jesus' conclusion is that Abraham, Isaac, and Jacob were still alive in spirit--not alseep and unconscious. The statement of Ecclesiastes 9.5, "...But the dead know nothing...," must be understood in its context of the search for meaning in life "under the sun" (1.3). The dead know nothing in that they no longer have any part in the affairs of life on this earth, not that they cease to exist or go into some state of total unconsciousness. Brotherly, Wayne S. Walker (From "Search for Truth," April 5, 1998).
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