It's counterproductive if you have a big vocabulary but use it to show off (which is unfortunately how most people use them). A big vocabulary used correctly can be invaluable.
There are two ways to develop your vocabulary. You can make it more florid, by adding lots of long obscure synonyms. This is the image most people have of a large vocabulary. Or you can make it more precise, by taking words you already know, that are more specific or more vivid than their everyday equivalents, and focus on being able to actually use them in conversation.
For instance, consider the word "burp". If I were being more florid, I might use "eructation" instead. You're right that this would be counterproductive. However, if I were focusing on precision, I might use "belch". Most poeple know what a belch is, and it sounds more vivid and exciting than "burp", but few people use it in conversation.
For an example of a large vocabulary that is precise rather than florid, Walt Whitman's Leaves of Grass has one of the densest vocabularies of anything on Project Gutenberg, yet it's still quite readable.
It's counterproductive if you have a big vocabulary but use it to show off (which is unfortunately how most people use them). A big vocabulary used correctly can be invaluable.
It's not clear to me what "correctly" means here. An illustrative example: I recently wanted to use "exacting" in a paper because, well, it was exactly the word to use in that sentence. I know about twelve similar words that each didn't quite fit for one reason or another, and I am not at all trying to show off my vocabulary by using it.
My advisor looks at the ...
Edit: I realise that I foolishly over-complicated and worded my question in a way that obscured what I actually meant. In essence, my question was: if we didn't have specialised vocabulary for things - say, in the area of rationality - would our rationality be hampered by our inability to be specific without long-windedness? Often words are created to bridge this gap when new concepts are created, so if we didn't have those words, would it take longer for us to understand or communicate and idea (to others or ourselves) and make it more difficult to be rational?
From the direction of the comments the general answer to my initial question is coming across as: "words are useful for communicating explicitly, and so an extensive or highly specialised vocabulary can be useful, if and only if the person/people with whom you are communicating understands those words". The internal understanding of concepts does not need words and thus a vocabulary.
I am curious about the relevance of vocabulary to rationality. I'm not talking about a basic vocabulary, but a vocabulary beyond that of the average, English-as-a-first-language adult. I believe there are a few correlations between intelligence as measured by IQ and vocabulary, as well as vocabulary and income(via IQ), but anecdotally I think it's fair to say that there are certainly people who are highly intelligent, but often irrational.
In reading through LW, I've come across a lot of new terms specific to certain areas of study, and I've had to look them up to fully understand that discussion of rationality - I assume this is probably true of most people new to the field, and applies to most specialised fields. Jargon is obviously useful within given fields where there is a need for detailed discussion of highly specialised topics, and helps one to discuss that area, but is it necessary to understand that jargon in order to practice in the field?
For example, I would think that a general practitioner would have trouble within his field if he did not hold the language to be able to specify what, in particular, was wrong with a patient, even if he knew what it was. Or could he not even be able to understand, say, that a patient was having a heart attack if he did not have the words for it? I suppose history might be a good indicator of this, or new scientific phenomena.
The field of rationality is one of both practice and theory - but if we didn't have an advanced vocabulary, could we still be highly rational? For example, my stepfather didn't finish high school, and makes up words like "obstropolous" (which I think kind of means stubborn and difficult to deal with on purpose) to say what he means, but he's also the type of person who, in a emergency, takes the most logical, rational course of action without panicking or doing something silly. On the flip side of this, he makes grand generalisations about races, religions and people while refusing to discuss the possibilities of individuality, or conceding any part of his argument to, well, evidence.
So do you have an argument for or against the need for an advanced or specialised vocabulary to be rational? Is it a question that's too vague, or with too variable an answer? I couldn't find any scientific papers on rationality and vocabulary, so I don't know if there's any data for or against, but I think it's an interesting question.
(This is my first LW article, so please be gentle but thorough with any criticisms you may have - I'm happy to improve or clarify!)