After the Bell: A humble epistle to Freedom Day

29 Apr 2025

Freedom is not just another word for nothing left to lose. In fact, it’s another world with an enormous amount left to lose.

In political terms, 27 April 1994 was the greatest day in my life – as I’m sure it was for so many of us in South Africa. I still remember it with shivers. I couldn’t believe it had happened, in my own lifetime, right there, right in front of me. It all seemed otherworldly, like you were participating in some kind of crazy dream. Could this really all be real?

This was despite the fact that the actual day was full of doubt, confusion and misgivings. People forget today, but there were three car bomb attacks in the week before the election and on election day itself. Nine people were killed. The election campaign had been raucous. Famously, the Afrikaner Weerstandsbeweging (AWB) had tried to prop up Lucas Mangope’s Bophuthatswana regime, and AWB members were infamously shot on live TV during a dismal failed coup.

The election apparatus was transparently thrown together at the last moment, and its failings and weaknesses became clear as the election progressed. There were actually three days of voting, and it was still a mess. In general, nobody really knew what to expect – which of course was to be expected. It was a kind of stress relief mechanism just to stand in an election queue for hours, it was a kind of solemn act of faith and resolution. Which is probably why so many people did.

And yet, in an economic sense that we can only see with some vague clarity now, the election was, apart from everything else, an implicit experiment in human development. And that is because the election constituted South Africa’s move from an authoritarian to a free state.

And so today, we celebrate Freedom Day, which by a country mile, is my favourite public holiday. Honestly, I would give up Easter Friday and Workers’ Day in a heartbeat before giving up Freedom Day. After all, there is no Diwali public holiday, even though it’s celebrated by more than a billion people; there is no Ramadan day, and so on. And, one points out slightly tongue in cheek, there is no Employers’ Day, without whom there would be no workers.

I suspect many of our civil liberties and freedoms today are taken for granted. Trying to explain, for example, how censorship worked during apartheid feels like a pitch for a script in a dystopian television series. Being old enough to know personally what it was like to live in an authoritarian state and a free country makes me view simple pleasures like travelling freely with a kind of awe.

Freedom and human development

But what about the economic argument? This is where things get really complicated, very fast. The demonstrable, conventional wisdom is that freedom has a very high correlation with human development. The Canadian Fraser Institute’s Economic Freedom of the World (EFW) index, consistently finds that countries with a higher economic freedom (secure property rights, free markets, rule of law) score higher on the United Nations’ Human Development Index (HDI).

For instance, a 2018 study by the Cato Institute found a correlation coefficient of ~0.7 between EFW scores and HDI. Just in case there is any doubt, that’s not a perfect correlation, but it’s enormously strong. This is a coefficient that varies from -1 where there is no correlation, to +1 where it’s absolutely certain. So correlation is strong, but not perfect.

Why does that happen? In theory, because freedom fosters innovation, entrepreneurship and efficient resource allocation, and that all drives economic growth and human development. In theory, civil liberties enable social mobility and access to education, while political rights ensure accountability, reducing corruption and improving public services.

So now, as a South African in 2025, you would be forgiven for raising an eyebrow at those assertions. Tell us again about reducing corruption and increasing accountability? And the much larger question, how is it possible that China, just to take the most obvious example, has gone from GDP per capita on a PPP basis of $2,000 in 1994 to $19,000 in 2023 with absolutely no political liberalisation at all?

Over the same period, SA went from a GDP per capita of around $9,000 to $1,400 with one of the most progressive constitutions in the world. There has been progress, but nowhere nearly to the same degree.

There are lots of other outliers too: Singapore (in some ways), Qatar, UAE are all high-growth, high HDI and authoritarian. But there are good examples of the opposite, too, of low freedom and declining HDI: Venezuela, DRC. The critics of the notion of a correlation between freedom and HDI point to the lack of causality and universality.

But critics of the critics point to some special factors that allow some authoritarian states to develop without improving freedoms. China, for example, has a two-thousand-year history of Confucian-oriented high-level administration and economic planning. And while civil liberties are constrained, economic changes have been dramatic. China’s low baseline in the 1970s meant even modest market reforms under Deng Xiaoping yielded massive gains.

It’s also worth noting that, like many authoritarian states, there is a tendency to see a declining rate of return. China’s growth has slowed over the past years, and like all authoritarian states, there is always the looming risk of an enormous administrative error, as we saw during the brutal Covid-19 lockdowns in 2023.

Yet Chinese advocates would argue that huge administrative errors are not the domain of authoritarian states alone. Hello, Donald Trump.

Yet it is generally true that big administrative mistakes in democracies have a way of correcting themselves fast, whereas big administrative mistakes in authoritarian states have a way of getting worse at a furious rate. Hello, Vladimir Putin.

As entrepreneur Mark Barnes and I discussed in the Stand Up! Business podcast this week, freedom is not just another word for nothing left to lose. In fact, it’s another world with an enormous amount left to lose. And despite SA’s lack of a big freedom dividend, its early days yet. Let’s ask that question again in another 30 years. DM

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Business Maverick

Freedom and human development