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The Bavli records in many places the existence of demons, and answers to this question cite rishonim and acharonim who take this seriously. Pesachim 112b relates a story in which demons are (initially) allowed to wreak havoc in the world at any time. (They are later limited to specific times.)

What is the purpose of these demons and their havoc-wreaking? Humans have free will and can thus act badly, but demons are not humans and I understand that only humans have free will. Demons are also not natural occurrences; earthquakes, tornados, etc. also wreak havoc, but that's built into the fabric of the universe that God created. And as far as I can tell (I may be wrong on this) demons are not acting on specific divine orders the way ha-satan does.

So what purpose do they serve? Why did God create them and allow them to act in the world?

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ze l'umat ze asa Elokim. just like there is a holy chariot of G-d with holy ministering angels so too there is a chariot of the Samech Mem with his ministering forces. it's part of the balance between good and evil. –  ray Oct 11 '13 at 5:19
    
Re: only humans have free will, See מלאכי עליון by Reuben Margoleous, under אשמדי, footnote 15 on Jewish, Muslim and Christian Demons. Also see the first entry of the סיטרא דשמאלה, Abalmus, first son of Adam and Lilith, a demon. –  Baby Seal Jan 16 at 4:51
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The Ramchal in Da'as Tevunos in the section בריאת הרע וגדריו, starting with siman 96 and particularly in siman 114 and 118, explains how demons came into existence. They are, in short, a natural outcome of the degeneration of the world into evil. It is hard to sum up, but the basic idea is as follows: the world was created in two stages, first with a general construct of all the structure of creation, and then the specific entities that were created, both spiritual and physical. The original construct defines what exists, and the subsequent "supply" gives the degree of perfection of that existence. When Hashem "hides His presence" as a result of our actions and misdeeds, this construct still exists, but without perfection. When the "hiding" reaches a certain threshold, things that are evil manifest result. That is where demons and destructive forces come from. Their existence is built into the framework of creation to allow "destruction" to exist.

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