wild fox koan.
The old man who made the original error maintained that a person who practiced with great devotion would "not fall into" cause and effect. To "fall into" is to become identified with. So his error was in believing that a person of serious practice would no longer be subject to this kind of identification.
Cause and effect, in this case, is the action of law. So the non-identification implies freedom from the action of law. Put one way, this allows the presumption of agency: one who is free from law becomes, so to speak, their own agent, and is, conceptually speaking, independent of the dharma. Yet this is, of course, impossible; nothing can become free of the dharma, so the thinking is clearly erroneous. The very presumption already arises from an egoistic belief, i.e., the belief that agency can be attained.
The koan raises the question, in other words, of whether agency arises within the laws, or lies outside the law. If it lies outside the laws it can become free of cause and effect, but if it is both a property and a consequence of the laws, it is impossible to avoid. As Gurdjieff remarked to Ouspensky, "if people were different, everything would be different."
It is impossible to exist outside the Dharma. Believing otherwise is the essential error.
The master who makes the error is punished by being reincarnated in the body of a wild fox. He appears, however, in the body of a man; and this makes it clear that the "fox body" is an allegorical body representing actions—causes, not substance—effects. The man's body, his corporal existence, is the reality, the effect, and it is still absolutely present. The monks and Baizhang have, after all, been seeing an old man come to the hall day after day—not a fox.
So for the trapped monk, it's his inner state, the state of causes, that is repeating in an endless series of corporeal habits, symbolized by the concept of reincarnation. The fox is the inner man: not the one who outwardly professes spirituality, but the one who inwardly lives the life of the sensual; and he does not live this life just once; he lives it "500 lifetimes," or, always.
So rather than buying into any supernatural literalism here, let's examine the symbolic implications.
Foxes, in Chinese mythology, represent female spirits rich in yin. They are essentially immortal, and in folklore feed on yang (male essence) in order to prolong their life. The fox furthermore symbolizes sex energy, sexuality. These rich associations cannot have been casual; the choice of animal as the vehicle of reincarnation was deliberate.
So we can infer here that the symbolic consequence of a failure to understand the fact that one cannot become free of the laws of cause and effect is an endless immersion in fecund sensuality. This is, in and of itself, symbolic of the material nature of life and sexuality. Immersion it it is representative of identification with life itself, that is, an inability to distinguish between one's conscious nature and the nature of the sensual life one is surrounded by. The fox, furthermore, is an agent of essentially selfish action, since it takes male yang energy in order to prolong its life and serve its own interests. Of course the fox enjoyed his five hundred lives... they were corporeal pleasures, because their essential nature was sensual and sexual. In life, the sheer pleasure of selfish action—belief in one's own agency— erects its own prison.
Put in other terms, the failure to understand man's inexorable submission to the rule of law and the dharma results in a deeper and deeper identification, which results from believing one is not identified. Perhaps readers will agree that we are treading into familiar territory here; it's a classic tale of what is called "falling asleep in one's inner work."
Awakening to the reality of law ("don't ignore cause and effect") is necessary. The "great realization" that takes place as a result of Baizhang's words is an awakening from this belief in one's own agency (from which the path of selfishness and parasitism naturally flows) into an awareness of the higher. Of course the immediate result is death; it's the spiritual death of the ego, which believes it serves itself.
Significantly, when the monks gather for the burial of the protagonist, they don't recognize the dead being as a man. The corpse is a fox; and thus the residue of the matter represents the ultimate worthlessness of a devotion to the sensual life. Their bafflement over the action of burying the fox indicates their inability to discriminate in an inner sense. The fox doesn't look like a monk; they are unable to see the fox in themselves, so its significance is lost on them.
Overall, the allegory is one of becoming aware of law, rather than being asleep to it. It is in essence a reflection of the idea of knowing one's place. The fox is an animal, without the capacity to know itself; the man has that capacity, but must use it. In doing so he must acknowledge his position, subject to laws; there is no escape from the dharma. No falling in or out of the law is possible, because the essence of the matter is the law.
In the coda to the koan, Huangbo plays the wag. "What if he hadn't given a wrong answer?" he says. Note he doesn't imply that a right answer be given; no answer is an equally valid option in this exchange. Baizhang, meeting a tease with a tease, entices him closer to collect an answer; but Huangbo slaps him, decisively eliminating the temptation to further define the moment for both of them. Neither one of them can identify with the tease, because a shock has intervened. It's actually a physical — as opposed to philosophical — illustration of the statement, "don't ignore cause and effect;" and it is what Gurdjieff would have called a stop.
This physical shock eliminates the tension of intellectual and emotional attachment and brings freedom; symbolized by Baizhang's laughter. He's delightfully reminded of the "bearded barbarian," Bodhidharma.
May your soul be filled with light.