Since the dawn of civilization, markets have been ubiquitous. Many of us have benefited from their focus and efficiency. Yet two widely held beliefs—that markets are best left unregulated and that markets are inherently benign—are naive and outdated. In fact, all markets require some regulation; and it is as likely that there will be clear winners and losers, as that all will benefit from a market economy.

For many, perhaps most, Americans, markets are sacrosanct. Most people in the United States cannot even envision a society that doesn’t revolve around an untrammeled market. In interviews with Americans (particularly young Americans), my research team has found a widespread assumption that any governmental intervention is bad, that the most accurate measure of success is how much money you have accumulated, indeed that general merit can best be gauged by one’s net worth—with perhaps an exception made for Supreme Court justices. People find it hard to believe that chief executive officers and star athletes did not always earn millions, that the marginal tax rate on high incomes was once more than 90 percent, and that some lead happy lives without numerous cars, homes, and private-school educations.

The accumulation and cross-generational transmission of wealth in the United States has gone way too far. When a young hedge-fund manager can take home a sum reminiscent of the gross national product of a small country, something is askew. When a self-made entrepreneur can accumulate enough money to, in effect, purchase that country, something is totally out of whack. It’s impossible to deny that market fundamentalism has gone too far.

There are two modest and generous ways to change this situation. First, no single person should be allowed annually to take home more than 100 times as much money as the average worker in a...