I actually think both you and the guy you are arguing with are half correct.
The real answer here, in my opinion, is that yes there would be pandemonium, and then yes, the world would go on without it, but then something else just like it will pop up. And that is because a liquid market for financial assets (whether that is securities, options on securities, futures, etc) will always be a massive benefit to the ability of businesses to conduct business, and the ability of individuals to preserve and increase wealth.
The current state of business within the current iteration of how people interact with one another isn’t some necessity.
Yes, the world may fall apart for a relatively brief moment in the grand scheme of things — but then life will go on.
The first step to understanding this is to drop the superiority complex.
Very little is actually needed to keep the world turnin.