Your labor cost only increases if you pay your workers more. Why would you pay your workers more? Why did your utility costs increase? Why did the cost of the goods you sell increase? My point is that it starts somewhere ... and it's an entirely arbitrary decision designed to milk more profits from the existing market. Ie., greed. Inflation doesn't have to happen, it's simply a function of greed at some point in the chain. And greed is what screws up the stability of the whole system. Free market capitalism is doomed to produce boom and bust cycles and an inordinate inequality of wealth, thus sewing the seeds of revolution.