After the First Temple
Jewish history was permanently altered by the destruction of the First Temple, and the exile that came afterwards.
The physical destruction wrought by the Babylonian troops was tremendous. The Temple, the palace, and all of the houses of Jerusalem were burnt, the walls of the city were torn down, and the remaining treasures from the Temple were taken to Babylon (II Kings 25:8-17).
Archaeological evidence shows that the destruction extended beyond Jerusalem to as far as Ein Gedi in the east, Arad in the south, and Lachish in the west. These cities, as well as Ramat Rachel, Bet Shemesh, and Bet Tzur were reduced to subsistence level villages. The population was diminished through military action and forced relocation; II Kings and Jeremiah differ on the numbers, but they both present a sense of economic and political disruption.
Other evidence, however, argues against seeing the destruction of 586 as a major upheaval. While the book of Kings says "only the poorest people of the land" remained (II Kings 25:12), even according to the larger report, the 10,000 people deported would have been a small portion of the population as a whole, albeit a wealthy and socially significant one. Unlike the Assyrians before them, the Babylonians did not settle new people in the destroyed areas; the Babylonian chief Nevuzaradan apparently redistributed some of the land of those exiled (Jeremiah 39:10) to those who remained. Enough people remained to maintain the harvest.
Some Locals Leaders Remain
Although the Babylonians exiled much of the leadership, some of the local leaders remained. The Babylonians appointed Gedaliah the son of Ahikam to serve in some administrative role over the people (II Kings 25:22); Ahikam had earlier demonstrated his sympathy to Jeremiah, and presumably to Jeremiah's pro-Babylonian politics when he saved the prophet from a death sentence pronounced by the priests and prophets after his "Temple Sermon" in the year 609 (Jeremiah 26:24). Gedaliah probably was appointed because he shared his father's pro-Babylonian sentiments.
From his capital of Mitzpah, north of Jerusalem, Gedaliah continued or at least supported the redistribution of land to the poor and those who had fled (Jeremiah 40:9-11). Jeremiah's report that they "gathered a great abundance of wine and summer fruits" (v. 12) may be historical, but also represents the prophet's not-so-subtle claim that Gedaliah's efforts met with God's favor. Furthermore, the presence of wine and fruit in the harvest indicates that delicate agricultural resources like vineyards and orchards had not been destroyed by the Babylonians.