As part of an alternate history timeline, I and various friends have discussed many times whether the Confederate States of America would have been viable economically by 1914, the presumptive start date of a world war in which it would go toe-to-toe with the United States. Our conclusion was that, no, it would not survive the encounter—not even if the scales were tilted consistently in its favor from the very moment of secession in April 1860.
Some considerations.
First, to give the C.S. as much of a “shot” as possible in the post-war period, it is convenient to reduce the length and breadth of the war. Perhaps Confederate garrisons in Tennessee don’t give way as readily in 1862 when Ulysses Grant first comes knocking. Probably Lee wins convincingly at Antietam. Assume that the Trent Affair spirals out of control into a British intervention that ties down Federal troops on either coast, helping the Confederacy to make maximal territorial gains—in Kentucky, Missouri, Virginia, and the New Mexico Territory.
Second, the loss must be shocking to the North, sparking a period of politico-military self-mutilation. West Point is shuttered amidst criticism that it became an intellectual forcing-house for traitors. Dependence on the militia system to defend the long frontier with Canada and quash inevitable skirmishes in the Border States fosters a perverse attitude toward spending on a standing army, particularly because it is obvious that the South could not hope to mount a successful invasion. The South, in turn, grapples with the opposite effect: martial heroes go on to political success, founding dynasties that come to resemble stratocracies.
Third, the South seems to have lacked the taste for a strong central government. Even during the darkest days of the American Civil War in OTL, Southern governors held out on Richmond. While one could argue that that the exigency created by Union irredentism tamps down on some of these centrifugal tendencies, the South will probably struggle to implement essential improvements to roads, rails, and rivers. Think about the transformative impact of the Tennessee Valley Authority and whether such a project is likely to be embraced in an environment where two prior revolutions against central authority have been carried off successfully.
Fourth, the South’s interest in experimental weaponry will probably continue simply as a consequence of the David-versus-Goliath dynamic. Especially given the amount of ground to cover, the South would probably become an enthusiastic user of armored trains for internal defense, and possibly airships as well. (If I remember correctly, Arkansas was one of the few locations that provided access to natural helium at the turn of the nineteenth century.) Many alternate histories assume that the South would choose to direct its naval doctrine around commerce raiding. There is even a possibility that Jefferson Davis would bring back the camelry in the Confederate West. Does the South build an appreciable submarine fleet? Does it invest heavily in torpedo boats and shore artillery to discourage blockade? What happens to the Northern military? It’s easy to see new canals built on the Great Lakes and a race to lay down lake battleships. (Avalanche Press looks at the latter question in their inventive wargame, War Plan Red.)
Fifth, for reasons previously discussed, territorial expansion is crucial to the Southern project. This raises the question of how the Southern racial and political model would accommodate persons of Mexican and Indian heritage. Do the Five Civilized Tribes emerge as favored partners like the Druze in Israel, do they fill a more ambiguous position like that of the Basters in South West Africa, or are they pushed into open revolt? Presumably the South expands to at least Guaymas and Sonora, providing an outlet on the Pacific Ocean. With a bit of timeline tinkering, it is probably possible to preserve Walker’s Nicaragua. Would the British intervene in a Spanish-American War to force a Spanish hand-over to the Confederacy?