The difference is that there were stronger social safety nets erected at the peak
Which were rooted in domestic industry and professional services, not extractionary practices targeting populations abroad. The erosion of these social safety nets has matched the erosion of labor unions, socialist organization, and left-wing party activity within the Scandinavian states.
the west has continued to dominate the global south
Western state control of the Global South has eroded with the outsourcing of US domestic industry abroad - particularly in the wake of the 1980s, when industry transplanted itself to the South Pacific. Latin American states are no longer dominated by western military juntas. African states are increasingly free of colonial and apartheidist regimes. South Pacific states are operating at parity with their western peers, rather than as occupied subordinates.
But even outside of this fact, the Scandinavian states are nearly non-existent in western foreign policy. Finland only just joined NATO, for instance. And only thanks to a collapse in European-Russian foreign policy relations, which I’d count as a mark against imperial domination rather than one in its favor.
USSR was not under these restrictions and did not behave in the way you suggest
The US actively embargoed Soviet States starting with the Mutual Defense Assistance Act of 1951. These sanctions continued into the 1990s and were slowly repealed under Clinton and then Bush in exchange for concessions by the United Russia government of Yeltsin and then Putin. What trade did occur was not inhibited by any some moral compunction of Soviet leaders. Exxon did business with the Soviets well into the 1980s, for instance.
USSR was able to have positive mutually beneficial relations with their partners as opposed to exploitative ones
That’s simply not true. The USSR had strategic partnerships with a host of left-leaning governments. But these were driven by tactical considerations, not ethical ones. The Soviets were happy enough to trade with the Israelis all through the Cold War period and with both England and France for most of its history. Meanwhile, the Sino-Soviet split persisted for decades despite the mutual benefit a Russia/China alliance would have had both for the region and for international communism broadly.
Soviets would routinely aid domestic revolutionary forces against colonial governments if it suited their needs, but were happy enough to back Syrian military dictators and Romanian dipshit demagogues entirely out of Realpolitik.
It’s not possible to have any meaningful democracy when the means of production are owned privately.
Social democracy creates public institutions that control the means of production within their fields. But the public institutions tend to be confined to education, health care, transport and other civil services. They don’t extend out to the industrial wing of the economy.
So if you want meaningful democracy, you’re going to be doing some social democracy at some point in your transition. Freaking out at people who organize towards publicly financed colleges and hospitals and calling them evil imperialists will do nothing to advance the cause of public ownership in the industrial sector.