I cannot think of a worse environment for innovation than Option 1. Ingenuity is severely limited by pressure, and Option 1 would be an incredible failure in any department related to progress. Not to mention how susceptible it would be to the corrupted government that would inevitably rise to power. Honestly, you think the Dictator/people in power would let their pampered families who contribute fuck all to "society" get killed? Not to mention what purpose would this government serve? It's essentially sacrificed all hopes of happiness for what can only loosely be defined as progress, but really what would the point be of preserving human life on Earth if no one actually enjoyed living it. Either your friend is trolling or he's incredibly ignorant as goes for everyone who even considered option 1.s
Option 2 isn't much better since complete anarchy is practically impossible, which by the way you should be thankful for. Given human nature a government is more or less required, but one that's uniformly democratic. And if its constituents want its power to be severely limited so be it, but you need something to enforce laws, education, construct hospitals, roads, infrastructure etc.
The problem with both options is that they're extreme, and just as no one rational will pick Nazi Fascism or extreme Communism, no one is going to pick Option 1 nor 2. You need a government yes, and given those circumstances regulation on population may be required (encouraging birth control, limitations on the number of children per household such as in China etc.), but there are limits and killing your own people clearly crosses that line (there is no instance in history where this has been a good idea).
