Given the North's advantages in population and economic resources, how could the Confederacy have hoped to prevail in the war?  

Even with the North's much greater population and resources, the South could have hoped to prevail by extending the war as long as possible, wearing down Northern morale. The South's goal was to achieve Northern recognition of its independence, and for this a diplomatic solution would have been a sufficient alternative to military victory. Additionally, many Southerners hoped for an alliance with Britain, but these hopes proved untenable, given Britain's opposition to slavery.

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Ultimately, when discussing a question such as this one about the Civil War, you should keep in mind that the Confederacy did not necessarily need a decisive military victory over the North. Rather, its political objective was ultimately to secure Northern recognition of its independence, and this objective could have just as much been attained had it outlasted the North in an extended conflict, wearing down Northern morale and public support. For the South, a diplomatic solution would have been an acceptable alternative, so long as Northern recognition of the Confederacy would have been achieved. This is actually one of the reasons why Robert E. Lee's invasions of the North have become the subject of debate and criticism among modern historians. For the South, the Civil War involved a primarily defensive strategy and mindset, and Lee's northern campaigns tended to run contrary to this defensive mindset, even while suffering heavy losses in the process.

In addition, when the Civil War began, Southerners had also hoped to form an alliance with Great Britain against the Union. However, here it should be remembered that, in the nineteenth century, Great Britain was at the center of worldwide abolitionism. Given Great Britain's public opposition to slavery, the passage of the Emancipation Proclamation had the effect of making any hopes for such an alliance impossible.

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