I've written a piece about this Sharia bullshit for Socialist Worker. It goes without saying that I oppose the Islamophobic tirades, but I hint at a problem with the Archbishop's position. For although Muslims should absolutely have the same rights as everyone else, the Archbishop's call is for a kind of 'integration' that I think enhances the power of the state to interfere in religious life. To expand a bit, I note that New Labour have been rather happy to try and co-opt a version of Islam that is acceptable to them. To give the state any more authority to determine in matters of religion, by separating an Islam that is compatible with "British values" from one that isn't, is to give it the ability to play 'good Muslim' versus 'bad Muslim'.
The liberal response to this is not only based on a misconception of what Williams said, but actually a misunderstanding of what secularism is. Many think that the reformation was fundamentally about separating religion from politics. It is true that Lutheran morality separates secular from sacred power, but the first legal achievement of the Reformation was the Peace of Augsburg, which formalised the non-separation of religion and politics by giving dictatorial power on confessional matters to local rulers. Really, secularism began with the policies of 'tolerance' pursued by early modern 'Enlightened' despots and liberal states, and it hasn't advanced much beyond that. I think the truth is that a complete separation of church and state is a chimera as long as the two exist as potentially competing sources of authority in the same territory. The state will inevitably seek to control religion, and religion will inevitably seek to gain a niche of authority for itself. The question is to what extent and in what way.
And here it becomes problematic. The capitalist state has no basis for choosing between conceptions of the good. It is like asking the phone company to tell you what's right and wrong. Its processes and hierarchies are completely insulated from the spaces in which conceptions of the good might be elaborated and contested, and it will inevitably subordinate such questions to its own drives. The only way that the state will be enacting a conception of the good that isn't entirely arbitrary or subordinate to its own priorities is if it is responding to popular pressure. In the long run, these dilemmas point to the need to move beyond the state, toward a maximally democratised public life. That is what direct democracy means.