I read this similarly to your first interpretation. If this is talking about the history of ideas, and in particular the 'age of enlightenment' (the move away from medieval scholasticism, birth of modern philosophy - Descarte and all that) this was still a deeply religious age, and I'm not sure that the issue is morality (eg acting according to what one believes is rational as opposed to what accords with religion), but rather just the freedom to use logic and rationality as tools for exploring the world.