To me that point touches on one prevalent misconception held by fans of the Confederacy. There was a federal government in Richmond too. And given the fact that it had to support a society based on suppressing a large segment of the residents, I believe it would have developed into something much more oppressive than anything we've ever seen out of Washington DC.
I don't think it would have lasted long enough to. A nation founded in blood and fire upon the proposition that its constituent territories can leave at will would likely have balkanized into mini nation-states in a generation or two.