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First, many literary critics see Santiago's role of a shepherd in Paulo Coelho's The Alchemist as a parallel to Christ's persona of the "Good Shepherd. This literally describes Santiago—he is a young man with a gentle spirit who cares for his sheep, knowing them as if they were his children.
In actuality, sheep are very smart. In the Middle East, when herds of sheep water at the same place, the sound of the shepherd's voice is easily distinguishable to the sheep so that they separate from the other sheep and don't become mixed in with other sheep.
With these associations in mind, I believe that in the context of the story, the sheep know and trust Santiago. He leads them, protects them, makes sure they are fed, and sleeps with them at night. There is often an association with sheep that they passively follow, and one who is referred to as a sheep is considered to be a person that has little sense of self, but must trail behind another. In truth, it seems that the sheep are actually showing their intelligence. Wandering off separates them from the herd, but also from the person who feeds and cares for them. I am reminded of the saying that refers to "biting the hand that feeds you." The sheep seem to know better.
To address your original question, I don't know if I can find a way to see the sheep as symbolic of people in life. The story is about Santiago, and the sheep are important to the development of the plot because they allow Santiago to travel. We learn early on that Santiago's father wanted him to be a priest, but the boy did not want to always stay in one place: he wanted to see the world, and keeping sheep allowed him to do this. If anything, I think that the sheep become symbolic of an easier but ignorant time of the boy's life. "Ignorant" here does not refer to foolish or obnoxious as we may sometimes use the word, but as naive and lacking knowledge.
The one time Santiago shows what we might consider to be a "flaw" is when he is robbed and learns that he will have to work for a year with the crystal merchant to earn only a portion of the money he would need to travel to Egypt. This information is staggering to him, as is his immediate loss of faith. Now that he knows his Personal Legend, he comes to a crossroad where he must decide to return to the past, but knowing what he will have missed (as does the crystal merchant) or overcome his disappointment and move forward. At first he decides to work to make enough money to buy more sheep, indicating his choice not to follow his dream.
There was a moment of silence so profound that it seemed the city was asleep. No sound from the bazaars, no arguments among the merchants, no men climbing to the towers to chant. No hope, no adventure, no old kings or Personal Legends, no treasure, and no Pyramids. It was as if the world had fallen silent because the boy's soul had. He sat there…wishing he had died, and that everything would end forever at that moment.
He turns to the merchant and says:
I'll work for you…I need money to buy some sheep.
It is only after he has worked for the merchant for close to a year and has learned about the merchant's lost opportunity to follow his dream, that Santiago decides against the sheep.
Other than a device that allows Santiago to travel and begin his quest, I don't see the sheep as symbolic of people today—based primarily on the context of the story.
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