"A long time ago, in an empire far, far away ..." British boys read classics.
The most famous epic was the siege of Troy. Every schoolboy would scratch his head at the sheer stupidity of the Trojans. Why, after a decade of brutal warfare, would the defeated enemy leave behind a 200 foot high, 40 tonne gift on wheels?
Did no one (apart from Cassandra) think to ask the obvious question — where's the catch?
That Trojan horse was the most notorious and visible example of the 'hidden enemy'. Subsequent Trojan horses have been just as obvious, but just as readily ignored.
In the mid-1970s, the ruling National Party in South Africa crunched the numbers, and realised whites were hopelessly outnumbered.
They devised a plan to cut the country into several sub-states, including one around Cape Town and one around the Johannesburg-Pretoria axis. These would have a permanent white majority and so guarantee that that part of South Africa would remain 'free and pure'.
But though the government could make new laws, it could not control human nature, so the idea was doomed. Racial segregation was impossible, mainly because Mrs Dirk van der Merwe could not function without a legion of black maids and gardeners, and her husband was damned if he was going to work down that diamond mine himself.
The same may yet apply to Israel. The number of resident Arabs within the old borders was a shade under 20% of the total population in 1996, and grew at 4% a year between 1948 and 2000. Add in the daily commuting guest workers and the idea of separating Israel from the Arab world with a wall looks increasingly forlorn.
Troy, South Africa and Israel have never been counted as major economies. The largest economic area remains Europe.
Inside 'old' and 'new' Europe there are now not one, but four giant, yet invisible, Trojan horses. Euro-extremists, from the rabid sceptics to the irrational dirigistes, are oblivious to the enemy within.
Whether the French, Dutch or British vote for or against the constitution is immaterial.
The enemies are swarming through the city and will prevail. They are ensuring that the nature of Europe, from Madeira to Moscow, has started to change radically.
This will be along paths that no politician expects and will determine the direction of each economy, including those that never join the euro nor even the EU.
Influx from the East
Very few economists in 1989 recognised the importance of the fall of the Berlin Wall.
The domino effect not only resulted in more than 20 countries emerging from the Soviet empire, but also forced major nations such as India and China to adopt a quasi-capitalist model.
The number of global consumers in basically capitalist countries doubled in less than five years, producing the broadest bull market ever.
Yet at first, the fall of the Wall had little impact on western Europe. It was the accession to the EU a year ago of 10 new countries that introduced the first Trojan horse.
East European migrants are all but invisible. Being white, mostly Christian and sometimes better educated than their Western counterparts, they readily adapt wherever they arrive. Highly skilled and hard-working polyglots, they are hungry to improve their lot.
These immigrants act as a significant deflationary force on wages, have a measurable impact on productivity and improve tax revenues. They will even mitigate the effects of the demographic 'pension time-bomb'.
The next Trojan horse is well hidden — in the boardrooms of European companies. Many Euro-corporations used to support 'Fortress Europe', with all its government subsidies and cosy cartels. Most capitalists instinctively prefer such a structure.
However, even the most xenophobic corporation now recognises that mass production of low value added products is often no longer viable within the old EU.
Sector by sector, Euro-corporations are relocating not just their manufacturing to China, India and eastern Europe, but many services as well. They have chosen to adapt rather than die.
Banks' urge to globalise
The third Trojan horse has a surprising location — inside the leading European banks. Money-lending has long been the most globalised business — witness the 15th century Medicis and Wittelsbachs.
The dismantling of capital controls in the late 1970s accelerated after the break-up of the Soviet empire. This policy has enjoyed universal approval because every country wants inward investment.
The problem is that bankers also like the highest possible return with minimal risk, and if this is not available through lending to European business, they are more than happy to export their loan books and investments to wherever returns are best.
Hence the largest private lenders funding America's twin deficits have been western European companies. (The Asian central banks have been the largest government buyers of America's debt.)
If these three horses of the apocalypse were not enough to ensure structural change, the fourth is the least obvious, yet most dangerous — inside the European Commission itself.
Ignore for a moment the proven incompetence, corruption and idleness there, and acknowledge that it has also attracted many of the brightest and the best bureaucrats, who share a reforming zeal.
Social policy — 'pensions for toddlers' or 'straight bananas' — often makes the headlines, but the core story is that these reformists have steadily pushed through the removal of tariffs, barriers and subsidies and the slow harmonisation of taxes (which, by accident, is driving many down rather than up).
Add to this brew the greater mobility of capital, labour, goods and services and the changes are dramatic.
This is why most of Europe, including the UK, is already suffering varying degrees of economic pain.
Here comes the future
The political story of whether the constitution will be passed is a sideshow.
Economics tends to determine the shape of politics, and Europe is undergoing its largest structural reform, not since 1945, but since Britain's industrial revolution.
Never before has the continent experienced such mobility, from Polish doctors working as cleaners in Brittany to Spanish banks selling mortgages in Scotland or manufacturers in Birmingham outsourcing their widget production to Bulgaria.
All restructuring causes enormous social pain and economic dislocation, such as when the IMF moved into the UK in the 1970s, or when Japan Inc forced a restructuring of America's manufacturing industry in the 1980s.
Major economic change is never easy and always produces some unintended consequences.
These include the prospect that Europe's derisory return on capital, low productivity and poor efficiency will slowly reverse the decline of the last 15 years.
Europe is the only major geographic block where structural reform, on an unprecedented scale, is about to commence. At such a pivotal point, equity returns can be unexpectedly exciting.
Jonathan Compton is managing
director of Bedlam Asset Management