Watson is an example of compartmentalized intelligence, he's very clever at some things and a moron at others.
He does have a racist streak that shows through here, and he's trying to justify it, but while different populations may have different average intelligence, that tells you nothing about an individual, because no one is average.

Heck, just because the average Democrat is more intelligent than the average Republican, doesn't mean that every Democrat is smarter than every Republican, does it?

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address