Forty years ago this month, one of the greatest religious thinkers of the 20th century died. In his long career in Switzerland and Germany, he had published millions of words, played a crucial role in inter-church discussions across Europe, denounced nuclear weaponry – and, before the war, done most of the work in drafting for the German churches a statement of open defiance against the Third Reich. Some of his most powerful lectures were delivered in the bombed-out ruins of the theological department in Bonn when the war had ended and he was able to return to Germany after being driven out by Hitler.

Karl Barth was, by any standards, one of the most deeply principled intellectuals of the age, someone who was quite ready to pay the price of conscience in an insane and tyrannical state. It was probably only his Swiss citizenship that saved his life. So it's all the more surprising to read some of his words in a Christmas sermon preached in 1931, where he says that the real good news of Christmas is that we are given permission to be free from our principles. We need, he says, "to be able to live with principles, but we must also be able to live without them".

Why is this good news – and what has it got to do with Christmas, with this Christmas in particular and our current anxieties and hopes?

What Barth saw beginning to take its grip on Germany in 1931 was a system of "principle" that worked quite consistently once you accepted that quite a lot of people that you might have thought mattered as human beings actually didn't. As the nightmare decade unfolded, the implications of this became clearer and clearer. And what he was warning against was the temptation of unconditional loyalty to a system, a programme, a "cause" which was essentially about "me and people like me". It's about the danger of my agenda, our needs, the programme of this particular group, its safety and prosperity.

And Christmas is supremely the story of a God who is not interested in telling us about principles. First comes the action – God beginning to live a human life. Then comes the appeal: do you love and trust what you see in this human life, the life of Jesus? Then the implication: everyone is capable of saying yes to this appeal, so no one is dispensable. You don't and can't know where the boundary will lie between people who belong and people who don't belong.

The 20th century built up quite a list of casualties around "principles" in Barth's sense. Various philosophies solemnly assured us that the human cost is really worth it, because history will vindicate the sufferings and sacrifices of the present. Keep your nerve, don't be distracted by the human face of suffering, because it will be all right in the end; we know it will because the principles are clear.

Fortunately the Western world has not for a long time seen the real horrors that this entails in terms of brutality and devastation. Yet we are not completely immune from appealing to "principles" in order to help us avoid some of the harsher consequences of our policies and preferences. They may in themselves be good and positive principles, not like the destructive ideologies of the past century. But we're bound to be uncomfortably aware at the moment that what looked like a principled defence of some of our economic assumptions (this is what real wealth creation means and there is no other coherent way of defending it) seems more ragged and vulnerable than it once did.

The unprincipled question won't be silenced: what about the particular human costs? What about the unique concerns and crises of the pensioner whose savings have disappeared, the Woolworths employee, the hopeful young executive, let alone the helpless producer of goods in some Third-World environment where prices are determined thousands of miles away?

People react impatiently to this, asking why religious believers should be taken seriously when they talk about economics. Fair enough. But the whole point is that the believer doesn't want to talk about economics, only to ask an "unprincipled" question – to make sure that principles don't simply block out actual human faces and stories. How we make it all work is vastly complicated – no one is pretending it isn't. But without these anxieties about the specific costs, we've lost the essential moral compass.

So Christmas doesn't offer an alternative set of economic theories or even a social programme. It's a story – the record of an event that began to change the entire framework in which we think about human life, so that the unique value of every life came to be affirmed and assumed.

Whether we realise it or not, the reason we are shocked by the mass killings under Hitler or Stalin or Pol Pot, by the indifference of a Mugabe to raging poverty and epidemic, is because this story has made a difference to how our civilisation thinks about universal human dignity.

The God of the Christmas story (and the rest of the Gospels) doesn't relate to us on the basis of any theory. but on the basis of unconditional love and welcome. That act of free love towards the entire human race changed things – even for those who didn't and don't share all the beliefs and doctrines of Christianity. And for those who do share those convictions, loving God and one another is a defiance of all programmes and principles designed to preserve only the wellbeing of people like us.

All of us, Christians most definitely included, have problems living up to this. But that's one reason why we tell this story repeatedly, the story of the "unprincipled" God who values what others don't notice, who relates to people we'd all rather forget, whose appeal is to everyone because he has made everyone capable of loving response. At least once a year we all – Christians or non-Christians – need to hear again that permission to be free from principles so that we can ask the question about specific human lives and destinies, about the unacceptable cost of programmes and systems when they are only about me and people like me.

And when that question is asked, says Karl Barth in his sermon, what begins to come through "the eternal light that requires nether fuel nor candlestick".

May this Christmas bring that light into all our lives, to light up every face we meet.