Freedom of speech is presented by Rushdie as essential for the telling of stories. As story-telling is such an important way of learning about ourselves as human beings, suppressing this vital activity diminishes our humanity. And that's what the wicked Khattam-Shud tries to do by poisoning the sea of stories,...
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thus polluting the source of all the wonderful tales that enrich our lives.
In this context, freedom of speech isn't some radical innovation; it's a way of retrieving what has been cruelly snatched away from us by the forces of tyranny. While it's impossible to overlook the autobiographical elements involved here, Rushdie's making a general point about humanity as a whole. For freedom of speech, like all human rights, is of its very nature universal and speaks to individuals and peoples alike wherever they are in the world, irrespective of their unique cultural traditions.
Rusdie knows what he is talking about when he writes about freedom of speech, especially artistic speech. Rusdie was famously under a fatwa for the depiction of Muslims in his novel The Satanic Verses.
Interestingly, in Haroun and the Sea of Stories, it is not the limits of free speech RUsdie explore but instead, the dangers of excessive speech.
The Land of Gup and Land of Chup are at war. In this passage, we see how questioning authority leads to mutiny:
“The Chupwalas...turned out to be a disunited rabble. Just as Mudra the Shadow Warrior had predicted, many of them actually had to fight their own, treacherous shadows! And as for the rest, well, their vows of silence and their habits of secrecy had made them suspicious and distrustful of one another...The upshot was that the Chupwalas did not stand shoulder to shoulder, but betrayed one another, stabbed on another in the back, mutinied, hid deserted....”