Richard M. Stallman (2002) _Free Software, Free Society: Selected Essays of Richard M. Stallman_, Joshua Gay, ed. Free Software Foundation.  

There is an ambiguity over the term 'free' in 'free software' which is why the distinction is made: free as in free speech not as in free beer. In other words it does not mean 'non-commercial' - or to explain further, there is no contradiction between free-commercial: selling copies and offering them gratis. It is not given away 'for free' as this confuses the issue with price not freedom. As Stallman clarifies:

'"Free software" is a matter of liberty, not price. To understand the concept, you should think of "free" as in "free speech," not as in free beer.' (2002: 41)

Rather than considering the ambiguity a problem, it is explored by Superflex in their project 'Free Beer' in which they collapse the distinction and attempt to make free beer as in free speech. As they jokingly put it: 
'FREE BEER is a beer which is free in the sense of freedom, not in the sense of free beer.' (http://www.superflex.net/projects/freebeer/) 

To be more precise, according to Stallman, free software means:
Freedom 0: The freedom to run the program, for any purpose.
Freedom 1: The freedom to study how the program works, and adapt it to your needs. (Access to the source code is a precondition for this.)
Freedom 2: The freedom to redistribute copies so you can help your neighbor.
Freedom 3: The freedom to improve the program, and release your improvements to the public, so that the whole community benefits. (Access to the source code is a precondition for this.)
(Stallman 2002: 41, first written in 1996) 

A program is free if the users have these freedoms. The freedoms are protected by copyleft conditions, not as a further restriction of freedom as with many rules but to ensure that conditions associated with freedom are maintained. See http://www.gnu.org/licenses/license-list.html (although this is not the issue here, however important).

The ambiguity is not easily settled by substituting the word free with others: open clearly indicates another set of problems. The history of this line of thinking is impossible to chart, or is as old as the sharing of recipes:
'it is as old as computers, just as the sharing of recipes is as old as cooking' as Stallman puts it (2002: 15). Some kind of history of Stallman's involvement is summarised in his book _Open Sources: Voices from the Open Source Revolution_ (O'Reilly 1999). [note: use of word 'voices'] The Free Software Foundation was created in 1985 to facilitate free software development propagating the free software production and distribution ideology - see the GNU manifesto (first written in 1984). Although generally describing the same category of software (the free software community), the distinction from the term 'open source' is thoroughly ideological in emphasising 'freedom, community and principle' over 'the potential to make high-quality, powerful software' associated with the open source movement (2002: 300) - people or profit in wider terms. (See Medosch for more on this.) The definitions come close but open source software (OSS) is a more open one, or weaker if you subscribe to the free software ideology. All the same, clearly the problem (or class enemy) here is not open source but proprietary software.