This offer was called the 'Stalin Note'. It was as you described in your question and was proposed in March 1952 to the Western Allies by Stalin. The majority opinion of german historians is, that it was just a disruptive action to delay the integration of West Germany into the western bloc and never considered serious or honest by Stalin himself.

The reception of the offer by the western allies and West Germany was also not very favorable. Adenauer, the german chancellor, called it a bluff and wanted to continue the integration into the western bloc.

The United States, Britain and France also didn't want to abandon West Germany as a deployment zone for their troops in case of war with the Soviet Union. If the whole of Germany would be neutral they calculated, that Germany would be easily overrun if the Soviets decided to attack (The note also stated that Germany if they were to be neutral only got to maintain a very small army) and the potential frontline of a war would be pushed far into France. Also France would be the only ally left on continental europe and they were always a very difficult one at that.

But there were also critics, who thought Stalin's offer was sincere and Adenauer only rejected it out of domestic reasons. The east was a lot more social democratic in their tendencies than West Germany as a whole and would have maybe endangered Adenauer's chancellery.

Overall most historians agree that the offer didn't seem sincere and also wouldn't have been a good one for Germany, but there aren't enough good primary sources to talk about Stalin's sincerity with absolute certainty. A german source for this topic would be 'Stalins großer Bluff. Die Geschichte der Stalin-Note in Dokumenten der sowjetischen Führung' from Peter Ruggenthaler, who searched for hints of the seriousness of the note in soviet archives after the fall of the iron curtain.

If it's alright with you, I'm going to repost something I wrote a while back on this subject. It's a little disorganized, but I hope it can suffice. I'd also like to invite people far more studied on this topic to "step in" and either support or refute things.

A couple of years later, in 1952, Stalin made a public offer, which was pretty remarkable, to permit unification of Germany with internationally supervised free elections, in which the Communists would certainly lose, on one condition - that Germany be demilitarized. That's hardly a minor issue for the Russians. Germany alone had practically destroyed them several times in the century. Germany militarized and part of a hostile Western alliance is a major threat. That was the offer. The offer was public. It also of course would have led to an end to the official reason for NATO. It was dismissed with ridicule. Couldn't be true. There were a few people who took it seriously - James Warburg, a respected international commentator, but he was just dismissed with ridicule. Today, scholars are looking back at it, especially with the Russian archives opening up. And they're discovering that in fact it was apparently serious. But nobody could pay attention to it because it didn't accord with policy imperatives - vast production of threat of war.

This is Chomsky's assertion, yet if the Stalin note was sincere then you have to explain a lot of inconsistencies. Especially considering Wettig's research into the archives, but we'll get to that later.

Firstly, you have to examine why the Soviet Union would make an offer of reconciliation yet maintain a hostile rhetoric towards West Germany in its own occupied territory of which it has total control? As a matter of visible policy there was no evidence to suggest it was genuine, and a large amount of evidence (such as a speech by GDR Prime Minister Otto Grotewhole on March 14, 1952 where he demanded that West Germany abandon ties with the west, and that the united Germany must model East Germany's economic plans and restrict political organizations to government approved ones... pretty much the exact opposite of what the note said mere days earlier) seem to indicate that there wasn't any real political plan for the note.

If the Stalin note (delivered on March 10) was sincere then why was the GDR prime minister (Stalin's lap dog) directly contradicting the very language of the note merely 4 days later by making contradictory demands? The note promised political freedom, political independence, and political rights for all german citizens, including Wehrmacht officers. At best this indicates a lack of political communication between Stalin and the GDR (highly unlikely considering how tightly Stalin ruled), at worst it makes it clear that Stalin never bothered to communicate with the GDR because the offer was not truly genuine. Then there's the leaks that occurred from defectors.

In April 1952 the west learned from recent defected spokesman of GDR foreign minister Georg Dertinger, Gerald Rummler, that the Soviet envoy to East Berlin, Georgy Pushkin, had told Dertinger that the Stalin note was only a propaganda offensive, the Soviets were not considering sacrificing the SED regime in free elections. Rummler said that according to Pushkin, the Soviet Union saw West German membership in the EDC as NATO membership in disguise, and it hoped to bring about the fall of the Adenauer government and prevent West German membership in these organizations. In early May 1952, a Soviet diplomat station in London made a similar comment: The Soviet initiative was meant only to stabilize the GDR.

If Stalin was sincere, then likewise we have to ask why he didn't pursue further diplomatic options when he clearly still had some available? He could have suggested his agreement to a UN assessment of conditions for free elections in the GDR. What did seem exhausted, however, judging from the cautious if not suspicious response of West German public opinion to the March 10 note, was the Soviet leader's arsenal of propaganda options. The Germans were not interested, at least not enough to change in Western policies. Wilhelm Pieck's own personal papers discuss the change in Soviet foreign policy from 1945 to 1952, and their ultimate failure to achieve Soviet goals in Germany. Russia subsequently abandoned attempts to use soft-power to influence West German politics after realizing how little sway they held with the public.

Based solely off information generally available prior to 1991 there are too many inconsistencies and irregularities in Soviet behavior to believe that there was any really genuine interest in the Stalin note. Post-1991 things became far more interesting as archives were opened and defectors fled to the west with secrets galore about the inner workings of the Soviet Union.

Gerhard Wettig is an authoritative voice on this subject, and is one of the world's foremost experts of the USSR and GDR post-1945. Wettig's own research on the East German and Soviet archives fairly conclusively proves the note was a Soviet ploy to disrupt the West's plans (Sorry, best link I could find since I can't access the file anymore).

Andrei Gromyko's minutes more or less prove beyond all doubt that the Stalin note was a deception tactic.

A Soviet note to the Western powers containing a vague-sounding proposal for a peace treaty with German, Gromyko wrote: would have great political meaning for the reinforcement of the fight for peace and against the remilitarization of West Germany and would help the proponents of German unity and peace to dissect the aggressive objectives of the three Western powers that are connected with the "General Treaty".

The "aggressive objectives" being the EDC and integration into the West, in response to growing skepticism about Soviet intentions regarding the resolution of specific German questions regarding the future of the country, its economy, and its governance, etc. Gromyko himself insisting on vague language to avoid giving the western powers specific political objectives to pin the USSR down with that could be used to actually advance the situation.

The Stalin Note was a political scheme to try and salvage the failure of Soviet foreign policy in Europe. Nothing more. For Chomsky to continue to assert that the Stalin note was an opportunity for peace in the face of such overwhelming evidence against such a conclusion reflects poorly on him, and personally makes me suspect he's willingly ignoring evidence that doesn't fit his own personal biases.