The over-painting of a fascia board bearing the name Shakespeare and Company, in Paris in 1941, remains a significant moment in the history of bookshops. Two weeks earlier, a German officer had walked in and tried to buy Finnegans Wake. The shop’s creator and owner Sylvia Beach had refused to sell it to him, claiming she had only one copy and it was her own. Two weeks later he returned to inform her that all her goods were about to be confiscated and within a couple of hours every shelf had been emptied. Books, photographs and furniture had all been carried to an upstairs apartment and a house painter had obliterated the shop’s title. The Anglo-American bookshop in the rue de l’Odéon, which had been the rendezvous for famous writers and where early purchasers of Ulysses, published by Beach, sometimes found themselves being served by its author, was no more.

There might its story have ended. But Beach lived on, and after the war ended, the GI Bill brought Americans to Paris. One of these was George Whitman. He may or may not have been related to his namesake, but he was certainly a great admirer of Walt. Having gained a degree in journalism from Boston University, this bookish vagabond hitchhiked and train-hopped across Mexico, Central America and the United States, then served in the American army during the second world war, ending up in Taunton, Massachusetts, where, briefly, he ran a small bookshop. Arriving in Paris, in the autumn of 1946, he enrolled at the Sorbonne and began swapping his GI food vouchers for other veterans’ book allowances. In this way he acquired a good enough book collection to set up a lending library in his hotel room.

Three years later, he was convinced that with his limited capital and specialist knowledge, his goal should be a significant lending library with a free reading room. But one of his regular visitors, the young Lawrence Ferlinghetti (later owner of the City Lights bookstore in San Francisco), upset his plans by telling him he had to get out of his book-cluttered hole and run a proper shop.

A year later Whitman wrote: “I live for the day when I’ll have a bookstore to embellish this workaday world. I now own one of the best private libraries in the Latin Quarter and, living as I do on less than a dollar a day, I have accumulated a small capital … I’ve talked with Sylvia Beach … There is a possibility that she would consent to go into business with me – although I’ve been avoiding offers of partnership, it would be an honour and a privilege to work with Sylvia Beach, should she decide to reopen Shakespeare and Company. Either way I hope finally to have a niche where I can safely look upon the world’s horrors and beauty.”

George Whitman, proprietor of the Shakespeare and Company bookshop, Paris, in 2009. Photograph: Eamonn McCabe/The Guardian

The partnership with Beach never happened, but she regularly frequented the Mistral bookshop that Whitman opened at 37 rue de la Bûcherie in 1951, whence she departed with almost more books than she could carry. Eventually she gave him permission to use the title of her former shop. It was a few years before he actually did so but, even before the name went up, Shakespeare and Company’s second life, the subject of this new book, had effectively begun.

It was not a normal shop, and this is not a conventional book. Rightly so, but there is some irritation in having to turn it sideways every time you want to read a caption to an illustration. It is fast and fun, historically slapdash and occasionally repetitious. The main text is regularly disrupted by poems, short memoirs and photographs, but what holds it together is the extraordinary character and behaviour of George, as Whitman is referred to throughout.

His premises initially consisted of only three rooms, running like a series of railway carriages into an increasingly dark recess, offering a labyrinth of alcoves and cubby holes. But he soon expanded into the apartment upstairs, which made possible a reading room and a continuation of his lending library.

His girlfriend at the time commented on the abounding energy within the shop. Whitman himself constructed the shelves and make-shift divans. A socialist entrepreneur as well as an ardent bibliophile, he not only aimed to stock his shop with the finest English language collection of books outside Britain and America, but also hosted free seminars at which visitors could learn Russian, engage in Italian conversation or discuss new topics of socio-psychological research. He had not forgotten the hospitality freely given him in the course of his early travels and encouraged those in need of a bed or a floor for the night (“Tumbleweeds”, he called them) to sleep in the shop. “I believe we’re all homeless wanderers in a way,” he would say.

Generosity lay at the heart of this quixotic enterprise, in small ways and large. George made ice-cream on Sundays for homesick compatriots and baked American pies in the stove in the hall. Among the established authors who frequented the shop were Lawrence Durrell and the Beat poets Allen Ginsberg and Gregory Corso. William Burroughs often attended the Sunday afternoon tea parties, and African-American writers sought refuge from the racism they had experienced in the States. Richard Wright did his book signings there. When Anaïs Nin called Whitman “a saint among books” it was almost certainly the hospitality he offered the young and needy that she had in mind.

One of the bedrooms in the bookshop. Photograph: Eamonn McCabe/The Guardian

Numerous famous writers frequented the shop or gave readings there, and to this day Jeanette Winterson, who has written this book’s preface, remains one of its “Tumbleweeds”. At one point Whitman’s eccentricity and the government’s bureaucracy nearly brought the shop to a close. Certainly the absence, as late as 2002, of any form of modern technology, even a computer or telephone, caused problems.

But a second Sylvia, namely Whitman’s daughter, and her partner have stepped in and, after an inevitable degree of internecine warfare, the bookshop has been expanded on the ground and in cyberspace. It now has a cafe, occupies six floors and has also taken over two premises around the corner. George’s ideals live on. He died aged 98, in his bedroom above the bookshop. “I’m tired of people saying they don’t have time to read,” he said. “I don’t have time for anything else.”

These “empires of the spirit”, in Whitman’s phrase, call for further attention in another book recently published, Browse: The World of Bookshops, edited by Henry Hitchings (Pushkin, £12.99). Sixteen contemporary authors, from 11 countries around the world, recount the role bookshops have played in their own lives, as well as the stories, habits and treasure associated with particular examples. Ali Smith, who works a stint for a few hours each week in her local Amnesty International second-hand bookshop, is fascinated by the way books become unexpected repositories for inscriptions and detritus that indicate something about the lives of those who once owned them. But all these writers convey the magic of bookshops, while also making their vulnerability in recent times a recurrent theme.

• Shakespeare and Company, Paris: A History of the Rag & Bone Shop of the Heart, edited by Krista Halverson, is available from Thames & Hudson