The standard counter is that some X-factor like a creativity multiplier comes into play that the "overworked" person doesn't have. I have also heard/read the "Over x amount of hours worked per day productivity drops." I think that holds for most people but not for the outliers who choose not to take vacations.
Interesting interpretation as well about markets as all of the examples I gave were decidedly not entrepreneurial in nature so I don't agree with your assessment that I made that "bold" claim, however I would probably extend the theory there as well.
This idea of more work is better is intuitive only at a completely trivial level and one that's unlikely to bear out in an environment of any sort of complexity.
Sure, I suppose if you're talking about a widgit factories where people repeat a task and have quotes, maybe more hours is better. (Though even then maybe not if on the whole you have higher burnout rates.)
You appear to take this at face value without even doing much digging. There is a myriad of evidence to support the contrary to your claim. Heck try Googling: "Working more hours is more productive" and you'll only find articles supporting the contrary.
https://www.google.ca/search?q=working+longer+hours+is+more+...
Both are pretty bold claims actually and I'd be surprised to see someone back them up, but I'm pretty dubious there is any merit to them.