"A Horse and Two Goats" is a story by Indian author R. K. Narayan. Its main focus is cultural insularity and miscommunication. Although some of the effect of this is comic, it also raises some serious points about the harm that such insularity does to both India and the colonial powers attempting to govern India and help India's development.
Both Muni and the American do not know each others' languages and thus have difficulty understanding one another. Muni therefore thinks that the American is trying to buy his goats, while the American thinks that Muni is selling him the statue. If we look at the story more analytically, though, we find that it addresses more complex issues.
First, as Muni is a poor villager, as readers, we feel that he is justified in having little knowledge of American culture, but we also think that the American, who traveled to India, and is intent on bringing back souvenirs to show off his sophistication, should be more sensitive to Indian culture.
Also, we note very different traditions and value systems. Although Muni is a poor villager, he is very knowledgeable about the great Sanskrit epics that are at the center of Hindu religion. He is himself pious, and understands and explains the spiritual significance of the horse. The American, by contrast, appears crudely materialistic.
In the exchange, both seem unaware of each others' needs and values. Muni's misunderstanding of the American leads him to sell off, for a desultory sum, a crucial part of his cultural heritage. In terms of the American, we get the sense that the author is trying to explain that donations of aid in the form of cash will not transform the lives of poor villagers for the better, and that colonialism is actually culturally impoverishing as well as exploitative.
This suggests that in a globalized culture and economy it benefits people in both developed and developing nations to understand each others' cultures better.
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