When discussing Sagan it is easy to fall into the groove carved by his atheism. Many people point to him as the like-able friendly face of the belief that god does not exist.
Unlike modern atheists -- Dawkins, Harris, and Dennet (for a brief example please look to Wired magazine) -- Sagan's skepticism about the existence of god did not leave him with ill feelings for religion. He believed that religion could be graceful and was once useful, but he was frustrated when religion put superstition before rational thought.
In his only fictional work, Contact, the action in the novel hangs on two beliefs. The first is that it is possible to teach science, skepticism, and rational thought through fiction. Second is the idea that, as human organizations both religion and science are flawed. Sagan saw that there is an unexplored space between faith and rational thought. As I read it Contact is an exercise in coming to terms with that gap.
The best example is the novel / movie in its entirety. However, since I don't have the ability to post the entire film, this excerpt gets to the point -- here we see rational thought break down and faith step in.
To hear Dr. Sagan speak briefly on religion, listen to the Peter Gzowski interview with Sagan, found in the Sounds of Sagan on the sidebar.
As a side I would also like to point out that the people who have contributed to Celebrating Sagan hold different takes on god and religion. I believe that it is a testament to Sagan's vision that people who have oppositional beliefs can come together underneath the umbrage of his world view.
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