Finance has a weird incentive structure. As my brother the stock trader explained it:
1) There is a practically infinite amount of work that any one group could be doing - there's always more data to be analyzed, companies to consider, etc., but there's diminishing returns to more work, because the best opportunities are exploited first and many kinds of financial activity are zero-sum competition over a finite pool of money. Hiring more people makes the total workload greater rather than dividing a fixed pile of work over more people. 2) Hiring someone takes money directly out of the pockets of their co-workers and the boss doing the hiring, so it's a last resort. Employee labor is the main expense, and pay and group "productivity" are tightly coupled: each group basically gets paid out of their own profits. If you're running a small group of traders - say, five people - and you decide to hire a sixth person, you and the other four people take a pay cut equal to that person's salary. (And because of diminishing returns, they don't make as much money per person as the smallest possible group that can do your kind of finance.) 3) Finance selects for people who want money more than time. People who can't devote just about every waking hour to work don't stay employed in finance very long - whether voluntarily or not. 4) Just about everyone in finance retires much earlier than in other professions. Once someone hits 40 or so they're usually burned out and leave the industry - they already have a huge pile of money, so they don't really need to keep working hundred hour weeks.
(1) Is true, just as it is true in scientific research, for example.
(2) Hiring people only if their expected contribution is greater than their expected cost is the baseline, standard, utterly normal practice everywhere.
(3) "People who can't devote just about every waking hour to work don't stay employed in finance very long" -- is false.
(4) "Once someone hits 40 or so they're usually burned out and leave the industry" -- is false.
I think you're confusing finance as an industry and small-scale, indie trading.
Conventional wisdom, and many studies, hold that 40 hours of work per week are the optimum before exhaustion starts dragging your productivity down too much to be worth it. I read elsewhere that the optimum is even lower for creative work, namely 35 hours per week, though the sources I found don't all seem to agree.
In contrast, many tech companies in silicon valley demand (or 'encourage', which is the same thing in practice) much higher work times. 70 or 80 hours per week are sometimes treated as normal.
How can this be?
Are these companies simply wrong and are actually hurting themselves by overextending their human resources? Or does the 40-hour week have exceptions?
How high is the variance in how much time people can work? If only outliers are hired by such companies, that would explain the discrepancy. Another possibility is that this 40 hour limit simply does not apply if you are really into your work and 'in the flow'. However, as far as I understand it, the problem is a question of concentration, not motivation, so that doesn't make sense.
There are many articles on the internet arguing for both sides, but I find it hard to find ones that actually address these questions instead of just parroting the same generalized responses every time: Proponents of the 40 hour week cite studies that do not consider special cases, only averages (at least as far as I could find). Proponents of the 80 hour week claim that low work weeks are only for wage slaves without motivation, which reeks of bias and completely ignores that one's own subjective estimate of one's performance is not necessarily representative of one's actual performance.
Do you know of any studies that address these issues?