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How is the US tradition of the free press different from traditions in other democracies?

Most democracies enforce "right of reply" statues where news organizations that have published critical remarks about, say, a candidate for office must, upon request, provide a forum for the offended individual to respond. The US Supreme Court declared that such laws violate the First Amendment. Many European democracies prohibit "hate speech" by law. US law does not. European legal thinkers defend their version of free speech and press as ultimately serving democracy better than the First Amendment. A "right of reply" law requires private news organizations to give someone they have criticized or attacked a voice, but it does not limit the organization from saying what it wishes. Isn't this government enforcement of "more speech" better than the "less speech" that would result without it?

And hate speech has a chilling effect on members of disparaged—indeed, hated—minority groups. Hate speech intimidates, and it may also incite or encourage violence. Does outlawing hate speech then not serve a central democratic value, so central that government should be willing to enact carefully drafted hate speech laws? Some American legal thinkers agree with European thinkers in defending bans on hate speech, but others see danger in any prohibitions on putatively political speech.

However distinctive the First Amendment, after World War II a faith in free speech and press became widely professed in many parts of the world, if incompletely established. The Universal Declaration of Human Rights, endorsed by the United Nations in 1948, includes Article 19 which declares, in its entirety, "Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers."

How could the American founding fathers have approved the First Amendment and also supported federal subsidies for newspapers and also passed the Sedition Act of 1798 that made criticizing the federal government a crime?

Try to see it their way: contemporary understandings of the First Amendment would not have made much sense to the founders. They certainly did not see the First Amendment as forbidding the federal government from encouraging the press. It only prohibits the government from abridging press freedom. So in 1792, the year after the First Amendment became law, the Congress approved and President Washington signed into law the Postal Act. In setting up the ground rules for the postal system, the Act provided that newspapers circulated through the mail—as newspapers typically were distributed—would qualify for a reduced postal rate. When newspapers were mailed to other newspapers, they could be mailed entirely free of charge. This was anything but trivial to early editors. Newspapers of the day were "aggregators." They got their content by reprinting stories found in other newspapers for their own local readers. So the Postal Act was, in a sense, a direct government subsidy of the primary means of newsgathering for the early American press; the newspapers could scarcely have survived without a ready and cheap supply of "exchange" newspapers.

The Sedition Act (1798) was something else again. By any plausible reading, it abridged freedom of the press. It authorized fines or imprisonment for editors who printed "any false, scandalous and malicious writing ... against the government of the United States." But it became law at the time of an undeclared war with France in an era when government was understood to be a vulnerable institution. Government was not a towering force issuing edicts from marble halls, defended by an extensive network of military fortresses, supported by highways it built and taxes it collected. The founders truly believed that calling into question the government or its individual officeholders genuinely threatened the survival of an untested republican government not yet a decade old.

In fact, about a quarter of all the "Republican" newspapers— those unsympathetic to the John Adams administration and its "Federalist" orientation—were charged under the Sedition Act and some of the editors went to prison. That did not, however, prevent the champion of the Republican opposition, Thomas Jefferson, from being elected president in 1800. The Sedition Act expired in 1801 and nothing like it would be renewed until World War I.

How did the founders reconcile the Sedition Act with the First Amendment? They didn't. The Act passed narrowly. Madison and Jefferson strongly opposed it. But the courts did not weigh in. At that time, there was not yet a tradition of judicial review to authorize the Supreme Court to decide if an act of Congress was a violation of the Constitution and therefore void. That would not begin until 1803 in the case of Marbury v. Madison.

 
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