Reflecting on 2015, Dr Barry Morgan said cuts to libraries and community facilities were "desperate".
Speaking to BBC Radio Wales' Sunday Supplement he also restated his opposition to UK military intervention in Syria.
Dr Morgan argued there were parallels to draw between the Christmas story and the new Star Wars film.
On austerity, the archbishop told Mai Davies: "When I look at my own childhood, brought up in a mining community, miners fought in order to build community halls and have libraries and suddenly we're told you can get all that on the internet, you really don't need libraries.
"But I think that does something to the soul of society... that somehow the mind and the imagination don't matter."
Dr Morgan said he would also remember 2015 as the year that Britain went to war with Syria - for which he says there is no moral case.
"I begin to wonder if we have learnt anything from our encounter with the Middle East.... and I know the cause is just and I know the so-called Islamic State is evil - but what about the implications for the civilian population and how is it all going to end?" he said.
"I'm not a pacifist and I think there are times when we have to go to war. The Second World War was a necessary thing to do - but I don't think this is comparable.
"I think that in some ways by us going in, there are fanatical extremist Muslims who think 'well that's what they're doing to us, we'll become more extreme'."
Finally, the Archbishop said there was a message for everybody in the latest Star Wars film - The Force Awakens.
"What that film is about is good does eventually overcome evil," he said.
"At Christmas we think of Jesus as the light of the world, and light sabres are a symbol of hope.
"And when you see individuals and communities standing up for what is right, when you see people being helped in all kinds of ways, when you see the Paris summit where the hope is that 195 nations have signed up to that, that gives me hope really that light ultimately will triumph."
The Archbishop of Wales has claimed austerity is impacting on the "soul of society" in Wales.