The third Principle of Jewish Faith, as codified by the Rambam (cf. Piyrush HaMishnayoth, Sanhedriyn 10:1), states explicitly that the Creator “has no physical body and is not a force which resides within a physical body” (אינו גוף ולא כח בגוף). This statement precludes the basic tenet of Panentheism, i.e. that God resides actually within everything that exists. And this sentiment does not originate in the philosophy of the Rambam. There were others – such as Rav Sa`adyah Gaon – who affirmed this as well.
Additionally, Rav Sa`adyah Gaon, in his well-known work Emunoth Wa-Dhe`oth, discusses extant ideas of creation as postulated by the various religions and philosophical schools around in his day. Although he was referring to his contemporaries, his list is still fairly comprehensive for our times, and one would be hard-pressed to find another metaphysical cosmology not mentioned by him there. One of the twelve theories of creation discussed is Emanationism (אצילות – i.e. the idea that God emanated his own essence into the lower forms of the creation, referred to by Rav Sa`adyah as “The third theory is that of him that asserts that the Creator of physical bodies has created them out of His own essence… [Ma’amar Rishon, III]). He then goes on to refute this theory with 13 separate refutations. Emanationism requires a belief in Panentheism. It is not possible to believe in emanation and to be a pure monotheist, dissociating God completely from any form or accident of physicality or spaciality.
Judaism has always championed the belief in creatio ex nihilo (“creation from nothing” – e.g. Rambam, Ramban, Rasag, et al), and has traditionally tolerated a belief in an [Aristotelian] primordial substance from which the world was created (e.g. Rambam, Kuzari, Ibn `Ezra, et al), by a completely transcendent and incorporeal God whom is completely removed from His creation and is not associated in any way with it.
Panentheism, although championed by many as being the true view of the Torah, is certainly a mistake and an aberration [read, “heretical,” i.e. incompatible with authentic Jewish teachings]. Equally as many cannot fathom how a veritable majority of “orthodoxy” has accepted idolatrous ideas. However, we are not more “special” today than were out ancestors in their day. Throughout our history, we have gone astray after idolatry, superstitions, and false gods/conceptions of God. These types of issues are dealt with all the time by the Biblical prophets, everything from actual prostration to statues to simply holding such beliefs inwardly. This is why Yehezqel (14:17) refers to those who “wayyinnazer me-aharay wi-ya`al gillulaw el libo – who separates himself from Me and brings his idols into his heart.” The only course to remedy – offered every time, whether in exile or in the Land – is through teshuvah and getting people back on track through proper teaching and education. Silence on these foundational issues in the name of “unity” has only led to the current situation where the tenets of monotheism have been all but eroded from the Jewish nation.
The reason why Panentheism and other constructs featuring emanation (אצילות) seem to make sense to people is due to the basic error that in order to interact with the world, God needs some physical mechanism. It is reasoned that since God upholds the existence of the universe at every moment then He must be involved at every moment with making sure that it endures – this is false. We say that the world was created by God through His “will” or “decree” because these are the least physical anthropomorphic descriptions we can come up with. In other words, we are trying to avoid the mythologies of ancient pagan cultures who maintained that the world was fashioned through the very actual labor of the gods. However, it must not be extrapolated from these terms that God must then be maintaining continual concentration to uphold the existence of the world. Although this is how “will” works for us, it is not how it works for HaShem. There is no concept of haysah ha-da`ath (“mental interruption” or “loss of concentration”) with HaShem.
Instead, the “decrees” of HaShem in creating the world should most aptly be viewed from the perspective of law. In other words, when a beyth diyn makes a decree, it continues (generally) until either the reality of the circumstances in which and for which the decree was originally made significantly change or until another, usually greater, beyth diyn arises who decides to overturn it. This is the implication of the pasuq, “Forever HaShem, Your word stands firm in the heavens” (Tiliym 119:89). HaShem is the sovereign Judge who “decreed” the world into existence and that reality has not changed, nor will anyone ever arise who may overturn His words.
In short, God created the world and is completely separate from it – He does not reside inside of it, nor is the world constructed “out of Him” (if such a thing were even possible, has wa-halilah). And if the complete separation between HaShem and the world gives you pause and makes you wonder “If HaShem is so far away, then how does He interact with the world?” then your view of God is ultimately physical. He – Blessed is He – does not need physical senses, tools, mechanisms, or spatial proximity to accomplish anything.
Kol tuv uverakhah,