I think the reaction to crime should focus on preventing crime by removing the causes of crime as well as of making victims and societies whole again.

It follows from this that a socialist justice system should be based on rehabilitation and restorative justice. Criminals shouldn't simply be locked away but should be helped to gainful employment and receive treatment and counselling to help them deal with anger issues, addictions etc. Criminals should also be made aware of the consequences of their actions, a drunk driver is more likely to get a deep understanding of why it's wrong if he has to clean up after traffic crashes or talk to people who were disabled by drunk drivers.

The reactions to crime should always be decided by the community the criminal comes from and take the individual circumstances into account as well as utilise the community and the criminal's own network to make rehabilitation work. At no point should a workers' state engage in the construction of criminal identities by telling people who break the rules that they are evil, dangerous, outside of society and deserving of punishment and the road back to a peaceful harmonious life should always be open and easy to tread.

A minority of criminals are so damaged that some sort of confinement is still necessary to prevent further crime or to make rehabilitation efforts possible but even then the confinement should never be more severe than necessary to ensure that and at no point should cruelty be a point.