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This blog post will be close to maximum disrespectful towards general ranks. The two reasons for my disrespect are the reasoning I will lay out and military history.
Today's armies (and air forces) have great many officers at general rank on active duty. A ratio of personnel strength to quantity of generals close to 1,000:1 is not unusual nowadays (edit: German military as a whole in 2019: 935:1 for troops to generals+admirals, assuming no vacancies among generals and admirals). The U.S. armed forces had a ratio of about 8,000:1 between overall personnel and generals plus admirals by late WW2, for comparison.
So, how many generals do you need?
I'll begin with the field army. One might think a brigade is commanded by a brigade general, but in many armies it's commanded by a colonel. So for a high scenario you need one general per brigade (none per independent regiment), but none for a low scenario.
The commonly most-respected ratio of brigades to divisions is three brigades in a division. The division commander has a general rank, but his executive officer and second in command doesn't need to have one. Moreover, we could use four brigades per division, but I won't choose that for the high scenario. So the high scenario is at five general ranks per division, low one is at one.
Next, the corps level. A corps usually also follows the rule of three, a corps with only two division makes really only sense if the mobilised strength of an army is either two or five divisions. We can safely assume that the second in command of a corps is at general rank like the commander himself. Let's add one reserve general. So we're at 17 generals for an army corps in the high scenario and six for the low scenario.
The entire German field army as of now and into 2030 is not going to need more than 17 generals and could very well make do with six.
So why are there so many more generals? They're not needed for the field army. Instead, they're in management jobs, comparable to management board members in a public company.
And here's the thing; we could hire civilian managers for most of those jobs. (Junior) officers of the reserve often advance in business leadership positions, so there's enough of a reserves pool and they can be called up even at high age (not just 45 years of age as is the limit for ordinary conscripts in some countries).
Imagine a mobilised army strength of two army corps. The 2nd (reserve) corps would need 6...17 general rank officers, but it would be inactive in peacetime. These general rank officers could be in exactly the kind of management positions where a civilian manager (even if he/she/it is a captain in the reserves) would be insufficient: Leading the military schools, doctrine development, future force planning.
Many Western countries are in NATO, and the "O" stands for organisation, but by now it should be a "B" for "bureaucracy". Great many career officers have jobs in said bureaucracy and in NATO HQs of often questionable usefulness beyond logistics management purposes. You cannot have a lean army with few general ranks and still play the games at this bureaucracy, for you would have to send generals to fit general rank positions in this bureaucracy. My advice is to largely stop wasting money on the NATO bureaucracy. The degree of influence on the largely pointless work there is small even for a country such as Germany. Command structures above Corps are the only really interesting HQ structures anyway. A country such as Spain would suffer practically no real negative effects if it ceased to participate in the NATO bureaucracy and command structure, for example.
So in the end, a bloated, top-heavy army of today could be crashed from around 200 general ranks to less than 40 (at two corps mobilised strength) without loss of deterrence or defence strength. You just need a couple years for the conversion and you need to make sure they never meet in the same room.
S O
P.S.: I could make a case that a European air force only needs two general ranks because so much operational decisionmaking happens at below general rank level. And don't get me started on admirals!
edit: The Bundeswehr had 211 generals (not just army generals) and admirals in 2019. I cannot find any more recent figure, it doesn't seem to have been disclosed any more. So we had about 100 generals in an army that could be described as having a corps-sized field army and hardly any ability to mobilise reserve combat formations.
And don't get me started about the quality of the generals. We promoted the wrong people and turned the right people into wrong people. The problems already begin at lieutenant level - many of those are simply not suitable to become officers. Some of them aren't even suitable to be volunteer soldiers.
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