Gulliver recounts the proceedings of one of the Houyhnhnms’ councils as relayed to him by the master horse. The council debated the question “whether the Yahoos should be exterminated from the face of the earth?” Those in favor point out that the Yahoos are not only a nuisance and a drain on Houyhnhmn resources, they are not even native to the land but instead appeared from somewhere else many years ago. The master horse steps in, sharing the knowledge of humankind he’s learned from Gulliver, to surmise that the Yahoos were originally from Gulliver’s own society and are his degenerated relatives. He suggests controlling the Yahoos as Gulliver has described his own people controlling the reason-less horses: castration. The council agrees to implement this plan.
From the Houyhnhnm perspective, humans are an invasive species that needs to be restrained. (This is more or less the European perspective on horses—an invasive species humans restrain by castration, harnesses, and stables.) Having acquired knowledge of the human practice of castration from Gulliver, the master horse can now apply that knowledge to the uses of his own Houyhnhnm society, though now it will be humans, not horses, who get castrated.
Gulliver proceeds to detail more of the Houyhnhmns cultural features. They make excellent wound dressings; they make good practical use of astronomy; they write excellent poetry; they make simple, sturdy buildings; they use their front hooves as humans do hands; and they make pottery. They only ever die of old age and never lament death. In fact, Gulliver recalls one female Houyhnhmn coming to a social lunch gathering a few hours after her husband had died that morning.
Unlike the Laputans, Houyhnhmns put their knowledge to practical use and enhance the good of society. Their easy attitude towards death could be considered superior to the human tendency to grieve and lament death, but the Houyhnhmn attitude could just as easily be considered a disturbing emotional numbness.
Gulliver explains that the Houyhnhnms have no words for evil and thus, to express anything bad, they “borrow from the deformities or ill qualities of the Yahoos” and simply append the word “Yahoo” to the word of the thing.
This linguistic tactic emphasizes that evils and weaknesses are aspects of human, not Houyhnhmn, culture.