I think Bruce has wanted for a long time to express his amazement about how stubbornly people cling to their intolerant attitudes – both socially and racially. It’s tough to comment on something like that without sounding preachy or accusing. But he hit on a subtle way to get his point across and then take it another step to say “Hey, don’t give up”.
The song is mainly about compassion, about understanding racial and social types, and beliefs and practices that are different from your own. It’s about a status quo that’s so complacent in its narrow-mindedness and bigotry that it seems it’ll never change. That’s why the line “Ah, but don’t you believe them” is so important.
One writer interestingly described the song as being about “the narrow-minded underside of Southern hospitality”. But it’s a universal problem, not just a Southern one.