Everyone is clearly reading too much into the question. There is no shepherd. Our fictional herd here is actually an allegory for the struggle between the lower class "the sheep" and the upper class "the dogs". A sheep can only do as a sheep does, and despite its best efforts can never ever be a dog. The belief that there is a shepherd, there to control the dogs, is a false hope given to the sheep by the dogs themselves.
Besides, even if there was a shepherd, what do you think happens to the sheep anyway? That's right.
I disagree though, the sheep invented the shepherd to give themselves a purpose.
History shows that a strong dictator can keep a population down for an awfully long time with nothing but violence. There's no reason for the dogs to bother inventing anything.
Besides, even if there was a shepherd, what do you think happens to the sheep anyway? That's right.