Their lives and property are less secure. This makes them more cautious about entering into cooperative ventures with people they do not know well. The information costs of dealing with strangers are high, and some people choose not to take these extra risks. Because of sin, the division of labor is reduced. Crime-prevention activities are a means of removing risk and increasing the level of cooperation.
Institutional authorities seek to reduce crime by imposing negative sanctions on law-breakers.
To maximize the division of labor in a world of sin, the State must impose negative sanctions only on law-breakers, biblically defined. By adding laws that go beyond the Bible, or even go counter to it, civil rulers reduce the division of labor. Legislators and bureaucrats who go beyond the Bible in seeking to stamp out illegal activities make it more expensive for people to cooperate voluntarily to achieve their ends. This reduces the division of labor. It therefore reduces people's wealth.