Dr George Carey said sometimes in modern Britain the only thing that could not be tolerated was to say that something was wrong.
He made his call for the re-establishment of moral guidelines to a congregation of about 20,000 at Britain's biggest Christian arts festival.
Dr Carey was speaking at the 23rd annual Greenbelt Festival, this year being staged near Corby, Northamptonshire.
And his message was applauded enthusiastically by a gathering of mainly young people, dressed in T-shirts and jeans.
The Archbishop told the crowd that he had last attended the festival 17 or 18 years ago when he had camped out with his family.
He said at that time the main theme of the festival was radical Christianity, and that theme still continued.
Dr Carey said to be radical went to the roots of the Christian faith. And when he was a teenager, Christianity was mainly characterised by a series of "don'ts".
But he told the crowd that Britain was now going too far the other way and it was time for some traditional modern boundaries to be re-drawn.
"At present we live in a society where sometimes the only thing that cannot be tolerated is to say that something is wrong," said Dr Carey.
"We have to say there are moral standards, both personal and corporate."
He added: "Too often people are encouraged to think no further than their own private world ...
"We are now seeing the consequences of a privatised, DIY morality working itself out in many aspects of our society.
"This applies also to our Church. It is tempting to look no further than our own private world, to focus on maintenance rather than mission, to focus on survival rather than sacrifice."
Dr Carey said the Church still had much to learn from the scandal of the "Nine O'Clock services" in Sheffield last year (where rave music was used to attract young people, and the worship took on cult-like attributes). He added that churches had to be accountable.
The Archbishop also paid tribute to Christopher Gray, the vicar murdered in Liverpool recently.
"His story, I hope, will be an inspiration to many to a new commitment to radical Christianity," said Dr Carey.
The Archbishop's sermon was the highlight of the four-day festival, which is co-organised by Christian Aid.
The crowd sang modern hymns in reggae-style with the backing of a rock band, in what was billed as "the funkiest communion that you have ever experienced".
During the festival, which attracted mainly people aged between 18 and 25, crowds have been entertained by rock bands and a variety of religious speakers.Reuse content