Take three kids and a flute. Anne says the flute should be given to her because she is the only one who knows how to play it. Bob says the flute should be handed to him as he is so poor he has no toys to play with. Carla says the flute is hers because it is the fruit of her own labour. How do we decide between these three legitimate claims?

There are no institutional arrangements that can help us resolve this dispute in a universally accepted just manner. Conceptions of what constitutes a "just society", argues the Nobel Prize-winning economist and philosopher Amartya Sen in this majestic book, will not help us decide who should have the flute. A one-dimensional notion of reason is not much help either, for it does not provide us with a feasible method of arriving at a choice.

What really enables us to resolve the dispute between the three children is the value we attach to the pursuit of human fulfilment, removal of poverty, and the entitlement to enjoy the products of one's own labour.

Download the new Independent Premium app Sharing the full story, not just the headlines

Who gets the flute depends on your philosophy of justice. Bob, the poorest, will have the immediate support of the economic egalitarian. The libertarian would opt for Carla. The utilitarian hedonist will bicker a bit but will eventually settle for Anne because she will get the maximum pleasure, as she can actually play the instrument. While all three decisions are based on rational arguments and correct within their own perspective, they lead to totally different resolutions.

Thus justice is not a monolithic ideal but a pluralistic notion with many dimensions. Yet Western philosophers have seen justice largely in singular, utopian terms. Hobbes, Locke and Kant, for example, wove their notions of justice around an imaginary "social contract" between the citizens and the state. A "just society" is produced through perfectly just state institutions and social arrangements and the right behaviour of the citizens.

Sen identifies two serious problems with this "arrangement focussed" approach. First, there is no reasoned agreement on the nature of a "just society". Second, how would we actually recognise a "just society" if we saw one? Without some framework of comparison it is not possible to identify the ideal we need to pursue.

Furthermore, this approach is of no help in resolving basic issues of injustice. How would you reason, for example, that slavery was an intolerable injustice in a framework that concerned itself with right institutions and right behaviour? How would we ensure that well-established and cheaply producible drugs were available to the poor patients of Aids in developing countries? When faced with stark injustice, the contractual approach turns out to be both redundant and unfeasible.

Much of Sen's criticism is directed towards the liberal philosopher John Rawls, whose 1971 book, A Theory of Justice, has acquired the status of a classic. Sen's gentle and polite deconstruction of Rawls shows him to be rather shallow and irrelevant. Rawls's approach, based on specific institutions that firmly anchor society, demand a single, explicit resolution to the principle of justice. Stalin had similar ideas.

Rawls is not just authoritarian but also elitist and Eurocentric. Just as Mill had excluded "the backward nations", women and children from his Essay on Liberty, Rawls openly acknowledges that the world's poor have no place in his theory of justice. Indeed, the very "idea of global justice" is dismissed by Rawls and his cohorts as totally irrelevant. Moreover, the kind of "reasonable person" needed to produce a just society is found only in democratic, Western societies.

Given the limitations of Rawls's theory of justice, why has he been turned into a demi-god? Sen does not tackle this question. But a viable answer is provided by the classical Muslim philosopher al-Razi, who declared that "the acquisition of knowledge and the practice of justice" go hand in hand. Justice acquires meaning and relevance, al-Razi argued, within socially conscious epistemologies. The opposite is equally true.

Theories of justice that exclude, by definition, the poor or issues of global injustices only perpetuate injustice. The main function of Rawls's theory of justice, it seems, is to maintain the status quo, where injustice is not just simply a part of the system, but the system itself. That's exactly why he is force-fed to students of social sciences.

Sen's alternative is a realisation-focused approach to justice which concentrates on the real behaviour of people and its actual outcomes. Taking a cue from "social choice theory", he wants us to focus on removing injustices on which we can all rationally agree. There is nothing we can do about people dying of starvation beyond anyone's control. But we can choose to do something about injustices that emerge from a conscious "design of those wanting to bring about that outcome".

I see two problems with this. The "we" who choose must include those who consciously perpetuate injustice in the first place – ruthless corporations, hedge-fund managers and the like. Moreover, design need not be conscious. It can, for example, be unconsciously intrinsic in the theory itself.

Indeed, theory does sometimes serve as an instrument of injustice. Think of free-market capitalism, along with its theoretical underpinnings, including the mathematical modelling of sub-prime derivatives, where huge profits for the few are produced from the misery of others. To do something about the injustices perpetuated by the dominant model of economy, we need to tackle the tyranny of the discipline of economics itself.

Reading The Idea of Justice is like attending a master class in practical reasoning. You can't help noticing you are engaging with a great, deeply pluralistic, mind. There were times, however, when I felt a bit unfulfilled. For example, we are temptingly informed that classical Sanskrit has two words for justice: niti, organisational propriety and behavioural correctness; and nyaya, which stands for realised justice. In the Indian context, the role of the institutions, rules and organisations have to be assessed in the broader and more inclusive perspective of the world as it actually emerges. We are also told of Mughal Emperor Akbar's idea that justice should be based on rational endeavour. But this is not elaborated. I also wanted to see some comparatively material on Islamic, Chinese and Latin American ideas on justice.

But these quibbles apart, this is a monumental work. "When people across the world agitate to get more global justice", Sen writes, "they are not clamouring for some kind of 'minimal humanitarianism"'. They are sensible enough to know that a "perfectly just" world is a utopian dream. All they want is "the elimination of some outrageously unjust arrangement to enhance global justice".

Ziauddin Sardar's 'Balti Britain' is out in Granta paperback

From prices to values: Amartya Sen

Born in West Bengal in 1933, Amartya Sen studied at Presidency College, Calcutta and Trinity College, Cambridge. He taught economics in Delhi, then at Oxford, the LSE and Harvard. In 1998 became Master of Trinity, and in 2004 returned to Harvard. His major previous books include 'Collective Choice and Social Welfare' (1970), 'Poverty and Famines' (1981), 'Development as Freedom' (1999) and 'Identity and Violence' (2006). A Nobel laureate, he is also a Companion of Honour and hold India's Bharat Ratna