The wise old witch is interpreted as the South African government. She keeps on urging the family to make their security system stronger, to protect what is most important, and to never let anyone in. This is how the South African government is oppressing their citizens--lying to them that they aren't safe, until it gets to the point where they really aren't safe.
Answer:
I believe it's the last one.
Explanation:
One needs to look now farther than the first paragraph to realize that Vonnegut's tale is laced with irony and satire. The strongest hint is when he mentions that there are over 100 ammendments in the Constitution. All these ammendments are designed to make society "perfect." Later on George and his wife Hazel are discussing how George's handicaps, the bags of birdshot tied to his legs, are terribly inconvenient and painful. Hazel suggests George break a law and remove the bags since he isn't competing against anyone at home. George replies that if he broke the law so would others and they'd end up right back in the "Dark Ages". These examples depict there is no such thing as a perfect society. Equality does not bring about perfection and competition is essential for a thriving economy. In every society there are winners and losers.
Sorry if i'm wrong.