[mthoms]

>Thus when you double a nation's size, the number of interacting 'parts' will exponentially increase.

This doesn't sound right at all. Why would the number of interacting parts increase exponentially? And why would that result in decreased economic efficiency rather than increased?

Doesn't this very idea run counter to one of the basic tenets of capitalism that "bigger is better" (due to economies of scale)?

>what's clear is that you can't linearly extrapolate one nation's experiences across nations of different sizes

Maybe true, but IMHO not at all for reasons of economic size. That is, all other things being equal, increasing the size of an economic system should make it more efficient, not less.