Troy Camplin, who blogs about the relationship between Austrian economics and literature, agrees with me that cultural production is closely associated with positive externalities. He writes:
"Richard Florida repeatedly argues that the presence of "bohemians," which of course includes artists and literary writers, positively correlated with the presence of the creative class that provides the driving force of most economic growth. The interactions among artists/writers and other creative people, ranging from programmers to advertisers, thus create the conditions for creative-based economic growth. Thus, the presence of artists/writers acts as a positive externality.
How might artists and writers gain a return on their contributions? Or are externalities inherently impossible to "cash in" on?"
Any thoughts on the question? My feeling is that (1.) if there was an easy solution to "cash in" there wouldn't be an externality, and (2.) to a large extent this misses the point - some things provide benefits that people don't want to monetize, and that's fine. Patronage and philanthropy of course are a major solution to these sorts of externalities: if a person gets utility from the utility of others that's a sure way to address externalities at least to a limited extent. Altruism internalizes costs and benefits.