"A Waiting Controversy"
Yitz commenting on A Story About The Baal Shem Tov [Part II]:
There is a waiting controversy whenever anyone learns the first perek of the Tanya and reads that non-Jews have only an animal soul and no Godly soul. I want to illustrate this a little bit. We say about ourselves, as God said about us, that we are the Chosen people. We are meant to be a light to illuminate the nations.
Now let's look at something else: Children are born without a Godly soul. All they have is an animal soul. From birth until the age of mitzwoth (13 for boys, 12 for girls) they have only an animal soul. Parents are said to be their 'good inclination' a term which is analogous with 'Godly soul.' What's the point? The Godly soul is there to inform and educate and ultimately raise up the animal soul to the level of Godliness. The Godly soul is already perfect and complete in its goodness, hence the term 'Godly soul.'
Our job in this world involves mainly the animal soul. We are given a Godly soul to understand and enlighten ourselves to transcend the partially evil animal soul and bring out its inner goodness or light. The potential and the test of existence all dwell in the animal soul.
So, what do we mean when we say the non-Jews have only an animal soul? In my small and insignificant opinion, we are explaining the idea of the Jewish people being the light unto the nations in a practical parent-child relationship. It isn't that the non-Jews have no Godly soul. We are the Godly soul of the non-Jews. That is our role in this world. If our actions aren't good, then we aren't playing our role as the Godly soul which sets the standard by which the animal soul learns to act. If we don't do our job, then the responsibility of the actions of the non-Jewish nations falls squarely upon us. Just as the responsibility for a child's actions fall upon that child's parents.
To strengthen that point, it is only through the parental actions of our forefathers that we 'earned' a Godly soul. Avraham, Yitzhak, and Yaakov earned for themselves their Godly souls and performed such otherworldly actions that they earned an inheritance of Godly souls for their children who follow after them.