From polytheism to monolatry

Summarizing the account given by Robert Wright in Evolution of God, around 700 BC, Israel (comprised by the two nations of Judea and Ephraim) was dominated and surrounded by Assyria and Egypt, both much larger and more powerful. Israel frequently was the object of humiliation and abuse by adventurous Assyrian invaders, and it lost much power and territory to them, eventually conceding all of Judea (southern Israel) to Assyrian invaders. Biblical figures Hosea, Amos, Zephaniah, and others were what we would now call populist nationalists, and opposed to foreign alliances with either one of these nations. They were basically xenophobic. Their feelings resonated with the populace because it was generally viewed that relations with these larger nations resulted in a "zero sum game". Whatever benefitted Assyria would diminish Israel. Cooperation and internationalism fell out of favor among the lower classes in Israel because they correctly perceived that they had nothing to gain, but much to lose. But many in the upper classes had accommodated to the Assyrians, and were actually living quite comfortably with this situation, enjoying imported food and other exotic luxuries.

1. Among the masses, the "Yahweh alone" movement grew strength from the resentment of all things foreign, including foreign gods. Among the dispossessed of Israel, a rejection of the many Assyrian gods took root - rejection of Milcom, Baal, and others in the divine council (i.e., the many godly inhabitants of that region - Psalm 82:1-2 "God has taken his place in the divine council; in the midst of the gods he holds judgment"). So, this "foreign policy" explanation accounts for the rejections of foreign gods - but what about the many competing domestic gods that were native to Israel (such as Asherah and El) not imported by conquerors?
2. The "domestic policy" explanation provided by the book says that competing rulers inside Israel began to try to out-do each other in their religiosity to gain popular support. In order to crush the power of nearby competitors, followers of Yahweh emerged on top at the expense of other local gods. Yahweh had always been a local favorite, and if any of the regional gods were to dominate, he already had a strong lead. Each of the competing local gods had their influential prophets and important temples. To poison the well against them, it became useful to essentially outlaw their worship (not deny their divinity), but just make it a criminal offense to serve them. "In short, supernatural pluralism was the enemy of royal power". For a king to consolidate political power, he also had to consolidate and centralize access to divine power under himself and his loyal prophets. So, this roughly summarizes Wright's account of the development of Western monolatry (worship of one god, though admitting the existence of many gods). Under King Josiah, Israel made giant leaps in this direction.

Other writers emphasize the influence of Persia, who conquered Babylon in 539 BCE, thus freeing the Jews from Babylonian control. They were Zoroastrians, worshipping a single god, Ahura Mazda. Their preference for monotheism probably influenced the Jews, who saw them as liberators, and Cyrus the Great (Persia's leader) as a Messiah.