What is social capital? In answering this question, the paper reports on new research which differentiates between social interaction processes and social capital as the product of those processes. Following a review of literature, structured as a social theory against which social capital might be understood, the paper then describes a study of a rural community, and reports on two analyses of data which contribute to answering the question, ‘What is the nature of the interactive productivity between the local networks in a community?’ The paper concludes that social capital, for which a new definition is forwarded, can only 'exist' if it is somehow able to be produced. This is the chief assumption of the paper. Social capital is defined as an accumulation of the knowledge and identity resources drawn on by communities‐of‐common‐purpose. If social capital originates in micro interactions which are in turn embedded in a meso and macro social order, then these processes and connections should be observable. This paper makes an initial contribution to the establishment of such micro, mesa and macro links.
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