While one who sings with his tongue on fire
Gargles in the rat race choir
Bent out of shape from society’s pliers
Cares not to come up any higher
But rather get you down in the hole
That he’s in.
— Bob Dylan, “It’s Alright, Ma (I’m Only Bleeding)”, 1965
And then, all of a sudden, we were slaves. Chapter 1 of Exodus moves quickly and gets right to the point. And just as quickly, it slows down to detail Pharaoh’s negotiations with the midwives (Exodus 1:15-22):

(15) The king of Egypt said to the Hebrews’ midwives, one of whom was named Shifra and the second of whom was named Pu’ah, (16) saying, “When you birth the Hebrews, look on the birthstool: if it is a boy, then kill him, but if it is a girl, she should live. (17) But the midwives feared God and did not do as spoken to them by the king of Egypt, but they kept the children alive. (18) So the king of Egypt called to the midwives and said to them, “Why did you do this thing, keeping the children alive?!”  (19) And the midwives said to Pharaoh, “Because not like Egyptian women are the Hebrews, for they are lively; before the midwife arrives, they have already given birth. (20) And God made good to the midwives, and the people proliferated and became very great. (21) And so, since the midwives feared God, [God] made them houses. (22) And Pharaoh commanded his whole people, saying, “Every son who is born, throw him into the river, but every daughter you should keep alive.
The liberation story is as terse as it is seminal. What is the narrative function of this episode with the midwives?  What are we supposed to learn from it and from the whole story as framed by it? What does it tell us about oppression and freedom?
Much of this question hinges on one, small, linguistic ambiguity:  Were the midwives Hebrews or Egyptians?  Does “למילדות העבריות” mean “to the Hebrew midwives” or “to the midwives of the Hebrews”?  The Talmudic Rabbis (BT Sotah 11b), Rashi, and the Rashbam, among others, think that they were Hebrews; Josephus, the Midrash Yalkut Shimoni (Yehoshua I:9), Abravanel, Shadal, Nechama Leibowitz, and many academic scholars think that they were Egyptians. Evidence that they were Hebrews includes that if so, the syntax of the sentence is smoother. Evidence that they were Egyptians includes the implausibility that Pharaoh would think that Israelites would participate in murdering their own people, as well as the statement that the midwives feared God (verse 17), which tends to be Biblical language to describe non-Israelites’ upstanding behavior:  though they don’t have a relationship with the personalized YHWH, they still should fear God (e.g., Gen. 20:11; Gen. 42:18, Ex. 18:21; Deut. 25:18; Psalms 118:4).
Personally, I find it more compelling to read the midwives as Egyptian, but either way, the presence of such long traditions for each interpretation invite us to think along two channels as we consider the function of this episode toward the whole exodus saga.
If the midwives were Hebrews, then perhaps the story is this:
Pharaoh knows that he can’t break down the Hebrews as a dangerous, oppositional force on his own; he seeks to undermine them from within. He fears the ascendancy of this independent tribe as a separate and powerful nation, so his goal is the dissolution of the Hebrews’ distinct identity. Draft infiltrators from their ranks who can divide and conquer. Men make culture and war; women assimilate in and up. Midwives, the most itinerant and perceptive members of the community, will see the opportunity to ascend the hierarchy, to “pass”, to become Egyptian by ridding themselves of Hebrew men, and from Pharaoh’s perspective, it will strengthen the hegemony of male Egyptian power to have more female subordinates/subjects.
It backfires. The Hebrew midwives refuse the temptation of self-hatred. They won’t be kapos. They aren’t duped by the gold-painted peanuts of personal advancement; they retain solidarity with their people, and commitment to the sanctity of life; they fear God.
Moral of the story: when your group is oppressed, those at the relative top of the trash heap should resist the chimerical temptation to feel important and superior, to internalize the language of their oppressors. Resist being bought out, especially on the cheap (it’s always on the cheap) and retain group solidarity. Fear God. Pharaoh is left having to wage public, oppositional war against the prolific Hebrews, and will have to rally mass, popular, racist support from his population. That will be politically risky, costly, and time-consuming. The houses the midwives receive as rewards must be suggestive, metaphorical houses of status and leadership (the monarchy and the priesthood in Rabbinic idiom) in place of the false status they knew to resist.
If the midwives were Egyptians, then perhaps the story is this:
Pharaoh is trying to co-opt the most vulnerable and socially lowest members of his people into doing his dirty work by turning them against the bogeyman foreigners who threaten his tyranny. They call his bluff.  They don’t fear Pharaoh and don’t get duped into identifying themselves with his vision at the exclusion of other vulnerable, exploited neighbors. They don’t feel proud of the pathetic power accrued by being a little bit higher up then someone else. They fear God, value life, and see power relationships for what they are.
Moral of the story: a whole people cannot be reduced to its most corrupt and despotic ruler, that all sorts of resistance against despots occur all the time, that real conflict is not between peoples, but between those who value life and fear God and those who seek to destroy life and freedom; that when your group is oppressed, liberation runs through solidarity with the other victims of that oppressor, even if it is hard to see their oppression from the narrow places of our restricted vantage point.
Why this Episode? Why Midwives?
But what it this episode doing here in the first place? The narrative of the descent into slavery is famously terse; why focus on this relatively detailed, specific element?
Sexual control and exploitation are linchpins of Pharaoh’s oppression. It is the Israelites’ exceptional fertility that triggers his alarm: “And the children of Israel were fruitful, and swarmed, and multiplied, and became very, very vast, and the land was filled with them. And a new king arose over Egypt who did not know Josef. And he said to his people, ‘Look, the Israelite people is too numerous and vast for us…’” (Ex. 1:7-9). First, he imposes labor subordination “in order to abuse them” (1:11), breaking the sense of stature and dignity that might be promoting their fertility. “But the more he abused them, the more they increased” (1:12).
Next, he tries to control their fertility by breaking their will to live, with burdensome, but pointless labor — to crush the sense of purpose which might motivate procreation. Then the midwives are brought in. What’s Pharaoh’s goal? Listen to his instruction to them: “When you birth the Hebrews, look on the birthstool: if it is a boy, then kill him, but if it is a girl, she should live” (1:16). Why the gender difference? What’s his goal?
If Pharaoh’s motivation were racial purity, he would command killing all the Hebrew babies. If he were worried about their fertility and becoming a 5th column, but enjoyed their free labor, then he would kill off the girls and spare the boys, whom he can continue to exploit for their labor.
When Pharaoh says to keep the girls alive, what’s he keeping them alive for? What will become of them? Most likely, as an unprotected female population without economic options, they will be drawn into sexual servitude, having to submit to Egyptian domination for survival. Pharaoh wants to draft Israelite females into a sexual service class without worrying that they will rebel. Now, when all these Israelite women have babies, they will be Egyptian babies insofar as they will have no other communal identity that could translate into political power, but they will still be outsider and tainted enough to keep them structurally subordinate, a low-class service population over which an Egyptian identity of power and domination can be created and made coherent.
After Pharaoh’s attempted subterfuge via the midwives, he makes this goal of sexual exploitation just a bit more explicit: “Every son who is born, throw him into the river, but every daughter you should keep alive” (1:22). There, he employs the active verb, “keep alive” – “tehayun” –  which the midrash interprets as an active plan to take the Israelite women sexually, “since the Egyptians were awash in depravity” (Shemot Rabbah 1:18). The Ramban points to a source for this interpretation when he says that this episode was prefigured by Avram passing Sarai off to Pharaoh as his sister: “As he was approaching Egypt, he said to Sarai, his wife, ‘Look, I know what a beautiful woman you are. When the Egyptians see you, and think, ‘She’s his wife,’ they’ll kill me and keep you alive/yehayu.’” The same word, the same grammatical form and a similar literary structure, and there, the keeping alive certainly implies sexual control. (See R. David Silber’s Haggadah commentary, p. 28.)
This later, more explicit, yet still subtle, directive to create a sex service class may illuminate Pharaoh’s intention when speaking to the midwives. There, his language was more innocuous, with more plausible deniability: “if it’s a girl, let her live” — “vahayah”. But the midwives saw through to his sinister intentions. That’s where the midwives’ disobedience and the indispensability of this episode come into sharpest relief. Israelite slavery — and so much systemic oppression ever since — is about the ideology that empowerment can be actualized only through domination, that there is only control or be controlled, oppress or be oppressed. For this existentially adversarial, dog-eat-dog-world conception, sex is especially contentious. Sex, in its most common configuration, highlights that species survival depends on collaboration between two people who are different from each other yet on the same team, and who experience pleasure through that solidarity. The first order of business, then, for a regime of domination, is to impose domination on sex and sexuality. Where you find slavery, you will usually find sexual abuse at its core. Sex is the epicenter of resistance, so it must be co-opted into the epicenter of subordination.
In that context, we understand the significance of the midwives’ heroism and how the story cannot proceed without it. Pharaoh tries to manifest Egyptian domination over the Hebrews through sexual domination of men over women, and to co-opt certain women into thinking that they are climbers by enabling that sexual domination, all the while actually solidifying those women’s vulnerability and subordination in the big picture. The trap is set, they catch it, and refuse. When offered a gilded sexual death, the midwives resist and choose life. Therein lies the key to the exodus from Egypt which still beckons us today.