What do the Master's words/actions tell us about him and how do the Lake-men escape Smaug?
Because we have been following the dwarves and Bilbo, we tend to sympathize with them. The master, however, is initially skeptical, concerned that the adventurers may actually be con artists or ineffectual dreamers. He realizes that there is popular enthusiasm for them, though, and aids them with supplies, mainly in order to get rid of them. There is also a sense that the Master is concerned that they will diminish his influence.
When Smaug attacks the town in Chapter 14, the Master correctly blames the dwarves, arguing that it was their theft of the treasure that caused Smaug to retaliate by attacking the town. This deflects attention from the contrast between his own cowardice and Bard's bravery.
Although the townspeople try to save themselves by jumping in the water and escaping by boat, these measures are not very effective. The town is only saved from Smaug because a thrush tells Bard about the hole Bilbo spotted in Smaug's armor, and because Bard then manages to shoot Smaug in that hole with his last arrow.
The Master of Lake Town does not speak very often or say anything of substance. The reader can see the weakness and selfishness of his character through his words or lack of them. When the Dwarves first appear at his dinner with the Elves, he asks a question as he hesitates unsure what to do. The people cheer Thorin so the Master just goes along with what the people want at that moment. When the Dwarves are leaving the Master speaks fair and insincerely to them. He provides them with supplies which is cheaper than keeping them on as indefinite guests.He doesn't speak at all to urge his men or encourage them during the Dragon attack, he tried to escape on his gilded boat, while his men, including Bard, fought the dragon. Later when the people want Bard as king, he uses his words to make the people forget his cowardly behavior and turn their anger on the Dwarves again showing his weak character.
The people of the lake protect themselves by jumping in water. The Master tries to escape in his boat.