From TheBestLinks.com
The expression free as in beer refers to things which are available at no monetary cost (like free beer at a party). It can be contrasted with the expressions free as in speech or free as in freedom, which refer to something which is free of restrictions, as in the freedom of speech.
Since the advent of the free software movement, these terms have entered frequent use, for categorising computer programs according to the licenses and legal fetters that cover them. The expression Free as in Freedom is also the title of a 2002 biography of Richard Stallman, founder of the Free Software Foundation.
In most other languages, there are two different words for these two meanings, e.g. gratuit (no cost) and libre (free of restrictions) in French and gratis and liber in Latin.
To some people (outside the particular context of software), "free beer" can imply free riding, or freeloading - taking advantage of something that is not paid for.
Often the expressions are used when "free" isn't all it seems. "Free as in beer" and "Free as in speech" can imply that something is not completely free--that there are strings attached.
See also: Gratis, Libre
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