Alex Mouton is an engineer who has been designing and manufacturing small wheeled bicycles for fifty years. Here is his list of answers to questions about small wheeled bike performance:

1. Why the small wheels? The small wheels are an essential feature of the Moulton concept. They offer many advantages.
With only half the rotating mass of the wheels on a 'conventional' bicycle, it is possible to accelerate faster.
They are extremely stiff and much stronger than larger wheels because of the short spokes.
The aerodynamic drag is lower; there is less frontal area and less spoke area causing turbulence to slow you down.
The centre of gravity is lowered, resulting in improved stability.
The small wheels free up space normally occupied by large wheels, allowing luggage to be carried lower. 2. Aren't smaller wheels harder to pedal?
No, because:-
The gears are chosen so that they correspond to pedalling a bicycle with large wheels.
The smaller frontal area results in less aerodynamic drag.
The lower inertia means that you can accelerate faster.
If you are still doubtful, consider the HPVs (Human Powered Vehicles) developed for the ultimate performance - many
of these use the unique 17" Moulton wheels and tyres fitted to the AM series bicycles.
http://www.alexmoulton.co.uk/FAQ.htm

Which engineer should we believe?

In my unengineered ignorance I only know that riding my Moultons has been a supremely comfortable, fast and pleasurable ride over the last twenty years.