In the magisterial documentary series The Civil War, by Ken Burns, Shelby Foote sums up the idea with his typically wry and profound way.
I think that the North fought that war with one hand behind its back. At the same time the war was going on, the Homestead Act was being passed, all these marvelous inventions were going on. In the spring of '64, the Harvard-Yale boat races were going on and not a man in either crew ever volunteered for the army or the navy. They didn't need them. I think that if it had been more Southern successes, and a lot more, the North simply would have brought that other hand out from behind its back. I don't think the South ever had a chance to win that war.
It is quite true that the Union had enormous advantages over the Confederacy. There were twenty-two million people in the North and only nine million in the South. Moreover, a third of the South's population were black slaves, which might be used for manual labor but which could not be used as soldiers. After all, if the Confederates were to give their slaves weapons, how could they be sure the slaves wouldn't immediately turn them against those who enslaved them? Even worse, many of these blacks would join the Union army if they took control of the territory in which they lived.
Bottom line: the pool of military manpower was much larger for the Union than it was for the Confederacy. It's no surprise, therefore, that the Northern armies were larger in almost every major battle than were the Southern armies. Only at Chickamauga in September of 1863 was a major battle fought in which the Confederates outnumbered their opponents, and then not by very much. More typical were battles like Chancellorsville, in which the South was outnumbered by roughly two-to-one. As Voltaire said, "Dieu est toujours les gros bataillions."
Perhaps even more important than the North's numerical superiority was its vast advantage in terms of industrial power. Throughout the Northern states, pillars of smoke rose from countless factories producing every conceivable kind of war material. Rifles and cannon, of course, but also uniforms, saddles, boots, haversacks, camp equipment, and all other sorts of things. Wars are fought with more than weapons; if your men don't have boots or the means to cook their food, the armies will dissolve. It was very easy for the Union to produce massive amounts of war material, but extremely difficult for the Confederacy to do so.
Another crucial advantage, strangely overlooked by historians, is the North's financial superiority. Then as now, New York City was the financial center of the country. Abraham Lincoln's government would have an existing fiscal infrastructure and easy access to credit, while Jefferson Davis had to start the war by begging pitiful amounts of money from state governments or tiny banks scattered around the South. Wars are won and lost on the floors of the bond market no less than the battlefield and in this regard the North had an even greater advantage than in manpower or industrial power.
Finally, the United States Navy remained entirely under the control of the government in Washington. Though not nearly strong enough to effectively blockade the Confederacy at the outset of hostilities, it served as the foundation for the development of what would eventually become a powerful naval force that would play a crucial role in the conflict.
To summarize, the Confederacy started its struggle for independence vastly outnumbered in terms of the number of soldiers, vastly inferior to the Union in terms of the industrial and financial power necessary to wage war, and lacking any fleet with which to combat the naval strength of the North. Given these facts, combined with the fact that the South did, indeed, lose the war in the end, I don't blame those who claim that the South never had a chance of winning.
I do believe, though, that these people are wrong. The South could have won the war. Allow me to set out a few facts so as to convince you that I am correct.
While conceding the enormous advantages the Union enjoyed, we have to acknowledge that the Confederacy had certain advantages of its own. The most important was the simple fact that they were fighting on the strategic defensive. The Union had no choice but to invade the Confederacy and conquer its territory, but the South did not need to do the same to the North. It merely needed to defend its own territory. Put simply, the South did not need to really win the war; it simply needed to avoid losing it.
Fighting on the strategic defensive, the Southern commanders were much more likely to be familiar with the ground on which the campaigning would take place than their Northern opponents. This advantage should not be underrated. Such seemingly mundane things as knowing where a river can be crossed, where a ravine is in which a regiment of troops might be concealed, or whether a road on a map is a real road or just a muddy trail can sometimes make the difference between victory and defeat. Throughout the war, the South's knowledge of the terrain gave it a decided advantage.
Much is often made about the idea that the Confederate generals were better than the Union generals. On the level of army and corps command, I do not really agree. It is true that Union commanders like Ambrose Burnside, Nathaniel Banks, and George McClellan left a great deal to be desired. But the South had plenty of terrible generals, too: Leonidas Polk, Braxton Bragg, John Bell Hood (at least as an army commander), and John Pemberton come immediately to mind. The South had men like Robert E. Lee and Stonewall Jackson, but then the North had men like Ulysses S. Grant and George Thomas. Both sides had a few outstanding army and corps commanders and a large number of mediocre or poor ones. I don't think either side can claim a significant advantage over the other in this area.
On a lower level, however, I don't think there's any question that Confederate officers were made of a higher caliber than their Yankee counterparts. The South excelled at bringing forth brilliant leaders on the regimental, brigade, and division level. Southern society before the war was militaristic to a degree unknown in the North. A much larger proportion of Southern families sent their young men into the military than was the case in the North. There were many more private military academies, such as the Virginia Military Institute and the Citadel, in the South than there were in the North. The militia system, largely in place due to fear of slave uprisings, was much more developed in the South than in the North. It should not come as any surprise to us that Southern society was able to bring forth outstanding military officers in a way that the North could only dream of.
As a representative example, consider General Robert Rodes. He was not a graduate of West Point nor had he been a career soldier before the war. He had graduated from Virginia Military Institute in 1848 and worked as a teacher and engineer. When the work broke out in 1861, he became a colonel and put his military education to outstanding use, rising first to brigade and then division command in Lee's Army of Northern Virginia. He fought gallantly through the war until being killed at the Third Battle of Winchester in 1864. The South was full of men like Robert Rodes, while the North had a great deal more trouble finding them.
The South was largely able to negate the Union's industrial advantage through an amazing, and underappreciated, effort to create a war effort almost from scratch. During the first year of the war, the Confederacy relied on weapons taken from federal arsenals at the time of secession, weapons run through the blockade from Europe, and weapons captured from the Union on the battlefield. Later on, however, a fair chunk of the South's war material was being produced domestically. Factories in Richmond, Atlanta, Selma, and other cities were turning out large numbers of rifles, cannon and other war material. An enormous facility at Augusta, Georgia, was built to produce huge amounts of gunpowder. This was largely due to the hard work and brilliance of a single individual: Colonel Josiah Gorgas, the Confederate Chief of Ordnance, who oversaw the creation of this sprawling manufacturing empire. Because of this, the South never lost a battle because it lacked sufficient weapons and ammunition.
The situation was very different when it came to the Commissary-General, Colonel Lucius Northrop, whose job it was to produce and transport food, fodder, and clothing to the Confederate armies. Northrop quite simply had no idea how to do his job; the dictionary entry for "incompetent" should have Northrop's picture next to it. He probably did more to deprive Confederate armies of food and clothing than every Yankee cavalry raid put together. When asked to take the helm of the War Department late in the war, John C. Breckinridge told Jefferson Davis that he would only do so if Northrop, an old friend of Davis's, was fired (Davis reluctantly got rid of him). The lack of food and clothing that bedeviled Confederate armies throughout the war, quite in contrast to the situation regarding weapons and ammunition, was not due to any inherent lack of resources so much as one man's incompetence. One can only wonder how much more effective Confederate armies would have been had a man of Gorgas's caliber been Commissary-General. It is clear, however, that the South's difficulty in getting food to its armies was due at least as much to its own failings as to the efforts of the enemy.
Then there was the morale factor. At the outset of the war, white Southerners of all classes came together to defend their homes and their way of life. Their attitude towards African slavery revolts modern sensibilities, of course, but there is no denying the fervency of their devotion to the cause when the war began. Sacrifices were willingly made and a huge proportion of the white Southern population eventually found its way into uniform. Though Southern leaders disagreed bitterly about strategy and the suitability of Jefferson Davis to be President, there was no difficulty in persuading their people of the need to fight. Outside of East Tennessee and a few other pockets, there was effectively no genuine opposition to the war itself. Abraham Lincoln faced a much greater task in the Union, where there was a large and active anti-war movement from the commencement of the war. In 1864, anti-war Democrats almost succeeded in bringing about the defeat of Lincoln in that year's presidential election, which might have meant the end of the war.
This, then, was the Confederacy: a largely united people fighting on their own ground under competent and often brilliant officers, eventually armed with weapons produced mostly in their own factories, knowing that they only had to avoid losing in order to win. The North might have superior manpower and material, might subject them to naval blockade, and might have access to vastly more money, but to consider the Confederates as hopelessly outmatched is simply incorrect. They were able to make themselves into a truly formidable enemy to the Union.
There were two genuine paths to victory for the Confederacy, either one of which might have come to pass had the course of history been a bit different. The first was the possibility of foreign recognition of the Confederacy by one of the great European powers. The second was the possibility that Northern political will to go on with the fight might collapse, leading to the defeat of the Lincoln administration and the arrival of an administration willing to make peace.
Foreign recognition was a distinct possibility, especially early in the war. The Trent Affair in the fall of 1861 very nearly caused a war between the United States and the British Empire. Britain and France flirted with recognition of the Confederacy in the fall of 1862 until the failure of the Maryland Campaign caused them to reconsider. Even after the Emancipation Proclamation made foreign recognition much less likely, there was an effort by some members of Parliament to push British recognition of the South in the summer of 1863 and there remained substantial support for the South in London and Paris even towards the end of the war.
Lincoln had made it clear that recognition of the Confederacy by Britain or France would be a cause for war. As strong as was the Union, it paled when set against the British Empire. The Royal Navy would have gobbled up the Northern merchant marine and simply blockaded the ports of the Union until it agreed to peace. Fighting would surely have erupted along the Canadian border and the United States would have had an obvious advantage, but every brigade the Union sent there would be one less brigade the Confederacy would have had to deal with. It also would have opened up European financial markets to the South, making inflation a much less serious problem than was the case historically. Putting all these factors together, it's quite obvious that a conflict between the United States and the British Empire (and probably France) would almost certainly have led to Confederate independence.
The other path to Confederate independence, that of a collapse in Union political will, was probably more likely. In fact, it very nearly happened in the summer of 1864. Contrary to popular belief, Gettysburg and Vicksburg did not mark the great turning point of the war, after which the Confederacy steadily collapsed. The great turning point was the summer and early fall of 1864. The 1864 campaign had begun as little short of a disaster for the Union. In the East, Grant suffered unspeakably heavy casualties in a series of terrible battles against Lee, which ended with the Confederates still solidly in control of Richmond. Meanwhile, Jubal Early raided Maryland, came within a hairsbreadth of capturing Washington itself, and burned the town of Chambersburg, Pennsylvania. In the Western Theater, Sherman seemed unable to either defeat Joseph Johnston's army or capture Atlanta, while Nathan Bedford Forrest was smashing one Union force after another in northern Mississippi.
All these defeats brought morale on the Northern home front to a low point and brought forth increasing demands for a negotiated end of the war. The price the Union was paying in blood and treasure, it was clearly felt, was not worth paying any longer, as the Confederacy appeared to be as strong as ever. The Democrats set forth a platform at their national convention that year calling for a ceasefire. Even Henry Raymond, chairman of the Republican National Committee, quietly suggested seeking peace talks. Abraham Lincoln was keenly aware that a ceasefire would be tantamount to Confederate independence, for if the fighting ended there would be no political will in the North for it to resume later on.
It wasn't until the summer and early fall of 1864, just before the presidential election, that the picture changed. Three great Union victories - Farragut in Mobile Bay, Sheridan in the Shenandoah Valley, and above all Sherman at Atlanta - restored faith among the Northern public that they were going to win the war and that the terrible cost would eventually be marked by victory. Lincoln as reelected and, as we know, the Union went on to win the war within the next six months. But the situation had been balanced on a razor's edge and could easily have gone the other way. Had it, the Confederacy could have won the war.
(Many readers will recognize the above scenario, as it forms the basis of the plot for my novel Shattered Nation.)
To conclude, it is wrong to believe that the South could never have won the Civil War. Yes, the North had clear advantages, but the South had advantages, too. Whether by the path of foreign recognition or political changes in the North, there was every possibility that the Confederacy might have emerged triumphant. Indeed, had I been an observer in 1861, I might have placed my money on the South.
Had the Confederacy won, needless to say, historians today would be arguing that the North never had a chance of winning and the victory of the South was certain from the moment the war began.