The upheaval in Ukraine is presented as a battle between the people and Soviet-era power structures. The role of western cold war-era agencies is taboo. Poke your nose into the funding of the lavish carnival in Kiev, and the shrieks of rage show that you have touched a neuralgic point of the New World Order.

All politics costs money, and the crowd scenes broadcast daily from Kiev cost big bucks. Market economics may have triumphed, but if Milton Friedman were to remind the recipients of free food and drink in Independence Square that "there is no such thing as a free lunch", he would doubtless be branded a Stalinist. Few seem to ask what the people paying for People Power want in return for sponsoring all those rock concerts.

As an old cold war swagman, who carried tens of thousands of dollars to Soviet-bloc dissidents alongside much better respected academics, perhaps I can cast some light on what a Romanian friend called "our clandestine period". Too many higher up the food chain of People Power seem reticent about making full disclosure.

Nowadays, we can google the names of foundations such as America's National Endowment for Democracy (NED) and a myriad surrogates funding Ukraine's Pora movement or "independent" media. But unless you know the NED's James Woolsey was also head of the CIA 10 years ago, are you any wiser?

Throughout the 1980s, in the build-up to 1989's velvet revolutions, a small army of volunteers - and, let's be frank, spies - co-operated to promote what became People Power. A network of interlocking foundations and charities mushroomed to organise the logistics of transferring millions of dollars to dissidents. The money came overwhelmingly from Nato states and covert allies such as "neutral" Sweden.

It is true that not every penny received by dissidents came from taxpayers. The US billionaire, George Soros, set up the Open Society Foundation. How much it gave is difficult to verify, because Mr Soros promotes openness for others, not himself.

Engels remarked that he saw no contradiction between making a million on the stock market in the morning and spending it on the revolution in the afternoon. Our modern market revolutionaries are now inverting that process. People beholden to them come to office with the power to privatise.

The hangover from People Power is shock therapy. Each successive crowd is sold a multimedia vision of Euro-Atlantic prosperity by western-funded "independent" media to get them on the streets. No one dwells on the mass unemployment, rampant insider dealing, growth of organised crime, prostitution and soaring death rates in successful People Power states.

In 1989, our security services honed an ideal model as a mechanism for changing regimes, often using genuine volunteers. Dislike of the way communist states constrained ordinary people's lives led me into undercover work, but witnessing mass pauperisation and cynical opportunism in the 1990s bred my disillusionment.

Of course, I should have recognised the symptoms of corruption earlier. Back in the 1980s, our media portrayed Prague dissidents as selfless academics who were reduced to poverty for their principles, when they were in fact receiving $600-monthly stipends. Now they sit in the front row of the new Euro-Atlantic ruling class. The dowdy do-gooder who seemed so devoted to making sure that every penny of her "charity" money got to a needy recipient is now a facilitator for investors in our old stamping grounds. The end of history was the birth of consultancy.

Grown cynical, the dissident types who embezzled the cash to fund, say, a hotel in the Buda hills did less harm than those that launched politico-media careers. In Poland, the ex-dissident Adam Michnik's Agora media empire - worth €400m today - grew out of the underground publishing world of Solidarity, funded by the CIA in the 1980s. His newspapers now back the war in Iraq, despite its huge unpopularity among Poles.

Meanwhile, from the shipyard workers who founded Solidarity in 1980 to the Kolubara miners of Serbia, who proclaimed their town "the Gdansk of Serbia" in October 2000, millions now have plenty of time on their hands to read about their role in history.

People Power is, it turns out, more about closing things than creating an open society. It shuts factories but, worse still, minds. Its advocates demand a free market in everything - except opinion. The current ideology of New World Order ideologues, many of whom are renegade communists, is Market-Leninism - that combination of a dogmatic economic model with Machiavellian methods to grasp the levers of power.

Today's only superpower uses its old cold war weapons, not against totalitarian regimes, but against governments that Washington has tired of. Tiresome allies such as Shevardnadze in Georgia did everything the US wanted, but forgot the Soviet satirist Ilf's wisdom: "It doesn't matter whether you love the Party. It matters whether the Party loves you."

Georgia is of course a link in the chain of pipelines bringing central Asian oil and gas to Nato territory via Ukraine, of all places. Such countries' rulers should beware. Fifty years ago, Zbigniew Brzezinski argued that the "politics of the permanent purge" typified Soviet communism. Yet now he is always on hand to demand People Power topple yesterday's favourite in favour of a new "reformer".

"People Power" was coined in 1986, when Washington decided Ferdinand Marcos had to go. But it was events in Iran in 1953 that set the template. Then, Anglo-American money stirred up anti-Mossadeq crowds to demand the restoration of the Shah. The New York Times's correspondent trumpeted the victory of the people over communism, even though he had given $50,000 and the CIA-drafted text of the anti-Mossadeq declaration to the coup leaders himself.

Is today's official version of People Power similarly economical with the truth?

· Mark Almond is lecturer in modern history at Oriel College, Oxford

mpalmond@aol.com