The mechanism I'm proposing is that the current generation has not been exposed to many of the toxic things that reinforced racist beliefs. Slavery, segregated schools, etc. Kids in school are taught why those things were bad and why racism is bad. While not all of society has abandoned racism, there's been enough of a push that the public institutions educating the next generation are making efforts to reduce it.
That's all just observational though. Around here it's not so much racism against black folks but rather against aboriginal folk (and to some extent, middle eastern folks). I hear almost none of that crap from my generation or the younger generations, and still hear horrible amounts of it from older generations. Yes, some people in those generations changed, but it sure seems like the "racism rate" is significantly lower than the mean in the younger generations and significantly higher than the mean in the older generations.
Edit: it's also quite possible that it hasn't gone away in the younger generations either, it's just not considered something that is acceptable to say in polite company.
Edit 2: and thank you very much for making me think more about this!
Don't you see the contradiction here? It can't be both.
Are individual people any less racist than in the past? Who knows? Probably unprovable.
But our perception of the world is not governed by how people are, it is governed by what people do. And every person has a choice to promote, tolerate, or suppress racism. Choosing the latter is what makes the world seem less racist.
That's not a product of free speech, it's a product of teaching people how to evaluate thoughts they come across in the wild.