This paper is strongly critical of the transformational approach to language, which, according to the author, "has presented an essentially incorrect view of the nature of language by treating it as a self-contained system, independent of its use as a medium of human communication." Four aspects of transformational theory found to follow from the "incorrect premise that language is a self-sufficient formal calculus" are discussed: (1) the rejection of the principles of association and generalization in favor of innate ideas; (2) the supposition that "deep structure" is not related in any knowable way to the perceived world; (3) the conclusion that a theory of competence based on an "ideal" speaker-hearer is the best foundation for an understanding of the language performance of real people; (4) the idea that linguistic theory cannot suggest a sound basis for language teaching. An alternate approach, pragmatics, defined as "the correspondence of linguistic forms to situational settings," is then presented. This approach, which stresses that language derives its value from its use alone, attempts to go beyond the sentence as an abstraction to the study of linguistic entities in a broader context. The implications of this approach for language teaching are briefly outlined. (FWB)