“It was papa made me leave. I am a boy and I must obey him.”
“I know,” the old man said. “It is quite normal.”
“He hasn’t much faith.”
“No,” the old man said. “But we have. Haven’t we?”
Hemingway, Ernest. The Old Man and the Sea (p. 2). Green Light. Kindle Edition.
Does “No,” mean “I agree with you”?
Yes, but you have to be careful when looking at it.
The whole sentence could be:
“No, he hasn’t, but we have. Haven’t we?”
That “No” relates to “faith” which the person they are talking about lacks. Hence it is an agreement on a fact – which is that the person has no faith.
The old man is also taken aback a little and tries to be more argumentative, so he agrees by repeating what the other person said and adds a “but.”