The central theme in ‘‘A Horse and Two Goats’’ and much of Narayan's work is the cultural collision, particularly between Indian and Western societies. Narayan employs humor instead of anger to illustrate the vast differences between these worlds: they exist in the same era and place but communicate in entirely different languages, both literally and figuratively. The story's two protagonists are strikingly different: Muni is a poor, rural, uneducated Hindu man with dark skin, while the American is affluent, urban, educated, likely Judeo-Christian, and Caucasian. Muni, as a devout Hindu, calmly accepts his destiny, whereas the American is prepared and willing to make significant life changes, such as traveling to India or giving up his return ticket to transport a horse statue home. Both characters are quite oblivious to each other's way of life.

Unlike many tales about cultural clashes, the communication breakdown in this story results only in confusion, not any real harm. Interestingly, even though both men feel somewhat unsatisfied with their dialogue, neither realizes that they are not genuinely communicating. Each man speaks at length about his own life and local matters without understanding that the other is not grasping the conversation. By the conclusion of their exchange, both men have achieved what they desire or need, and neither has sacrificed anything significant. As an Indian writer composing in English, Narayan has personally encountered the tensions between Indian and Western cultures. While this conflict can sometimes be distressing, he finds it purely entertaining in this context.

Although Muni and the American share little in common, the most prominent difference between them is their respective wealth levels. Narayan carefully illustrates Muni's dire poverty at the story's outset, noting that even in his "prosperous" times, his living conditions were significantly lower than those of most Americans. In contrast, the American takes his wealth for granted and seems unaware of the disparity between himself and Muni. He nonchalantly offers cigarettes to a man who has never seen one, complains about enduring four hours without air conditioning to someone who has never had electricity, and boasts about enjoying manual labor as a weekend hobby to a man who has toiled in the fields from dawn to dusk. Without a second thought, he gives Muni enough money to start a business. The American is not intentionally flaunting his wealth; he simply perceives it as his entitlement. This nonchalance underscores the vast gap between them. Narayan does not criticize the American for his wealth or for not aiding the impoverished Muni; instead, he aims to highlight the stark contrast in their financial situations, prompting readers to reflect on the relationship between wealth and worth.

In a subtle manner, "A Horse and Two Goats" explores the different types of education one might receive. Muni, born into a lower caste during a time when formal education was reserved for the Brahmins, the highest caste, never attended school. He has never left his village and finds joy in watching trucks and buses on the nearby highway, which gives him "a sense of belonging to a larger world." Muni is unaware of his exact age. Despite this, he has a profound understanding of his cultural heritage's two major texts, the Ramayana and the Mahabharata. He gained this knowledge by participating in plays and listening to temple speakers, allowing him to recall these stories and their wisdom when necessary.

In contrast, the American character has fully benefited from an American education. He possesses a room filled with books he treasures as objects ("you know I love books and am a member of five book clubs,...