Social capital is a resource that includes the willingness of members of society to cooperate with each other, even when it is not in their own individual material self-interests to do so, or enforce beneficial social norms, even when this is materially costly for the enforcer. Evidence from economic choice experiments suggests that affect may play an important role in the individual-level decision process that generates these behavioral tendencies. Negative affective responses to uncooperative behavior can lead to a breakdown in social capital, if there is no option to punish. Given a punishment option, however, individuals discipline uncooperative types, even though it is materially costly to do so. This can completely counteract the tendency for social capital to decline in repeated interactions. Positive affect, triggered by punishing uncooperative types, appears to play a role in generating this socially beneficial willingness to sanction.