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This is a brilliant exercise!

I have to imagine that once the conceptualization of language and some basic grammar existed word generation was a much more common thing than it is now. It's only been since the time of Noah Webster that humans have been actively standardizing things like spelling. If we can use Papua New Guinea as a model of pre-agrarian society and consider that almost 12% of extant languages on the Earth are spoken in an area about the size of Texas (and with about 1/5th the population of Texas too), then modern societies are actually severely limiting language (creation, growth, diversity, creativity, etc.) [cross reference: http://www.scmp.com/infographics/article/1810040/infographic-world-languages]

Consider that the current extinction of languages is about one every 14 weeks, which puts us on a course to loose about half of the 7,100 languages on the planet right now before the end of the century. Collective learning has potentially been growing at the expense of a shrinking body of diverse language.

To help put this exercise into perspective, we can look at the corpus of extant written Latin (a technically dead language): It is a truly impressive fact that, simply by knowing that if one can memorize and master about 250 words in Latin, it will allow them to read and understand 50% of most written Latin. Further, knowledge of 1,500 Latin words will put one at the 80% level of vocabulary mastery for most texts. Mastering even a very small list of vocabulary allows one to read a large variety of texts very comfortably. These numbers become even smaller when considering ancient Greek texts. [cross reference: http://boffosocko.com/2014/07/05/latin-pedagogy-and-the-digital-humanities/ and http://dcc.dickinson.edu/vocab/vocabulary-lists]

Another interesting measurement is the vocabulary of a modern 2 year old who typically has a 50-75 word vocabulary while a 4 year old has 250-500 words, which is about the level of the exercise.

As a contrast, consider the message in this TED Youth Talk from last year by Erin McKean, which students should be able to relate to: https://www.ted.com/talks/erin_mckean_go_ahead_make_up_new_words