Markets and what they can(not) do
Smith's example of economies of scale (the pin factory) was, like most of his writing on economics, copied from other writers. (Acknowledgement of sources wasn't expected in those days.)
Any sizeable market town shows the same concentration of trades: all the butchers are in one place, competing, as Oliver 7 noted, for decreasing margins, instead of being spread out to satisfy the needs of the population. This is why a democratically managed market system is more efficient in the longer run, both to satisfy demand (i.e. to provide supply) and to secure it against mishap (like the floods in Thailand). The proponents of completely free markets, who have held sway since Margaret Thatcher's time, come unstuck in a changing world, because unfettered markets don't look ahead and provide for anything but the short run - the situation in which nothing changes. (Command economies also come unstuck, as we saw in the collapse of the Eastern Bloc.)
Of course, betting on the future exists, but it is still based entirely on current data, which only exacerbates the impact of long-run change. Our banking system is a nice empirical experiment that proves the point. :-(
Companies and investors have no short-run incentive to provide for accident. However, markets are not natural laws but social phenomena: responsible governments or even international organisations have a duty to ensure that populations cannot be unduly harmed by changes in circumstances. If governments leave markets to operate without any regulation, there is a high price to pay.