Most of what we consider crime exists out of necessity and desperation. If you remove the cause of the desperation, in the case the government and the ruling class, you significantly decrease crime. That being said, there will be some crime no matter what and yours is a question I've pondered without ever reaching a clear conclusion. There really is no clear-cut answer to how it would be dealt with, as there are many varying schools of thought on it. Personally I think a return to "citizens arrests" would be best, followed by an open public forum and a vote by all who attend. As for the punishment, that would of course vary according to the crime.
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