(If something isn't clear, or you have questions, please ask and I'll try to clarify.)
Chapter 2 - Anti-reductionism and the Natural Order
2.1
There's a conflict current in philosophy, between various forms of scientific, materialist naturalism and "anti-reductionism." According to materialism, all that exists are physical facts (revealed by physical sciences), and everything in the cosmos can be understood in reference to these facts. Anti-reductionism, on the other hand, doubts that things like "consciousness, intentionality, meaning, purpose, thought, and value" can be reduced in this way. It is 'negative' in the sense that it points out the problems of materialism and that something is missing in that account, but it doesn't always offer alternatives. Nagel wants to see if a 'positive' account, an alternative understanding, is possible.
"... our mental capacities apparently depend on our physical constitution," so whatever explains biology must also explain mind. But neither the mental, nor the physical parts that come with the mental, can be fully explained by current science. Evolutionary biology cannot account for the appearance of consciousness. What are the consequence of rejecting reductionism? If reductionism fails to account for certain aspects of reality, materialism must also be false. "A genuine alternative to the reductionist program would require an account of how mind and everything that goes with it is inherent in the universe." This leaves two possibilities: either the universe is "not exclusively physical" or "there is no comprehensive order."
2.2
Nagel's guiding conviction is that mind is "a basic aspect of nature." Support for this is found in one of the conditions of science: "the assumption that the world is intelligible." The world can be not only described but also understood. If it couldn't be, we would have had no scientific discoveries and experiments wouldn't work - nothing would make sense. How can we explain the order that science seemingly discovers? One answer is that it's 'just the way things are,' and nothing really explains it - we're just describing facts. But Nagel thinks that it makes more sense to assume that the fact that the universe can be understood "is itself part of the deepest explanation of why things are as they are." Some explanations are better than others simply by the virtue that they give greater understanding and are more likely to be true. If something initially seems arbitrary, "that is because there are further things we do not know, which explain why they are not arbitrary after all. … The intelligibility of the world is no accident. … Nature is such as to give rise to conscious beings with minds; and it is such as to be comprehensible to such beings. Ultimately, therefore, such beings should be comprehensible to themselves."
2.3
Natural science is one of the ways in which the world is intelligible. But how much of the universe can be explained simply in reference to physical laws? All of it? Even if this were the case, science would still have to account for the intelligibility that makes science possible in the first place. It attempts to do this by explaining mind as s "highly specific biological side effect of the physical order." This is because it seems physical laws (with greater and greater refinements throughout history and projected into the future) as the only way to understand the cosmos, and thinks that it is the best way to come to "the most fundamental explanation of everything."
This has led science to evolutionary biology, which sees the possibility of explaining life in terms of physics and chemistry, all built on the foundation of particle physics. Even if the details are still fuzzy, in principle, a full explanation should be possible, thus explaining life and minds capable of understanding all of this in terms of basic physical laws. But isn't that premature? As long as we don't know, it seems arrogant to claim to know exactly how future discoveries will progress, and which possibilities are ruled out before the fact. And if physical laws explain everything, why do those laws hold in the first place?
2.4
Theism is the polar opposite of materialism. It sees mind as the fundamental level that explains everything, "including the explanation of the basic and universal laws themselves." Physical laws are a consequence of mind, not the other way around. The intelligibility of the world is seen in terms of God's intention or purpose (we are miniature versions of a comprehensive mental source - God's mind - thus explaining how mind fits into the world). But if the world really is intelligible, as it seems to be, it should be possible to understand it. Concepts like God's mind (and materialism) put a block in the way of complete understanding, "stopping point(s) in the pursuit of understanding." We can't come to full understanding because we can't think past them. Nagel wants to find a way to explain the cosmos that accounts for mind "as a fundamental principle of nature along with physical law," without falling back on divine intention, and without explaining it away in terms of matter.
2.5
In terms of understanding ourselves, both theism and materialism attempt to do so "from the outside" - with reference to something external to ourselves. In theism, we understand ourselves in reference to God, who is transcendent (we can't know God's full purpose or understanding, and even if the world is intelligible as a result of God's intention, it isn't fully so to us). We extrapolate our own self-understanding to the ultimate level of God. In materialism, we extrapolate our scientific understanding based on study of some parts of the world, to the whole of the world. Both attempt an understanding that transcends us - we seem drawn to a larger world view that encompasses everything, not just ourselves. "And to succeed, that larger world view must encompass itself" (which materialism and theism do not).
Naturally, any such attempt has to start with our own point of view - it's our observations and reasoning that begin the process of making a world view, after all. Both theism and materialism try to explain how we can trust our own faculties to engage in this process in the first place. (If we can't trust our perceptions and thoughts, how can we come to any firm conclusions?) For theism, we trust our perception because God would not deceive us; for materialism, because we wouldn't have survived if we couldn't reach generally reliable beliefs (e.g., that's a bear, not an acorn). Either way, it's always possible that our beliefs are systematically false. But even then, Nagel thinks there's a third option for a transcendent world view (one which transcends a mere understanding of ourselves, and places us within a larger whole), which is plausible, "more modest and perhaps more realistic." He thinks this is possible, even if it appears that our very faculties for doing so are 'contingent,' or dependent, on our seemingly chance evolution. "The hope is not to discover a foundation that makes our knowledge unassailably secure to but find a way of understanding ourselves that is not radically self-undermining, and that does not require us to deny the obvious."
2.6
Even if theism reassuringly attempts to account for more of reality than materialism, it only offers a "very partial explanation of our place in the world." It doesn't explain how God's intention or purpose actually operates, and therefore doesn't give a comprehensive account of the natural order of the cosmos. It "pushes the quest for intelligibility outside the world," not from within. (God is outside of the natural order, not governed by natural laws.) It recognizes "brute facts" that can't be explained by science (e.g., the origin of life, birth of consciousness), explains them as products of divine intervention. In fact, "Such interventionist hypotheses amount to a denial that there is a comprehensive natural order." In other words, we can't explain it, so let's just say God did it.
Materialism does attempt a full understanding, but isn't very reassuring. It undermines itself. When we theorize about evolution, we're using faculties that are allegedly a product of this evolution. But can we trust a product of evolution to come to correct conclusions about evolution? Nagel doesn't think so. "Mechanisms of belief formation that have selective advantage in the everyday struggle for existence do not warrant our confidence in the construction of theoretical accounts of the world as a whole." Just like vision, which we trust, but know could be faulty, our cognitive faculties could be reliable, but not in the sense in which we usually take them to be reliable - as in science in general, and maths, and logic. Also, "[the evolutionary hypothesis] does not explain why we are justified in relying on [our cognitive capacities] to correct other cognitive dispositions that lead us astray. … Evolutionary naturalism implies that we shouldn't take any of our convictions seriously, including the scientific world picture on which evolutionary naturalism itself depends." Again, this isn't a criticism of our faculties, but a criticism of evolutionary theory; there is another possibility. It's not unreasonable to test hypotheses by reference to common sense - "ordinary judgments in which we have a very high confidence" - in fact, they have to be.
2.7
Nagel also thinks we must reject the view that rejects any external (transcendent) self-understanding, and which understands the world solely from within. Such a project denies the possibility of the quest for a single reality, "because there are many kinds of truth and many kinds of thought …" So how can we combine what we do know into a coherent world view?
First, we know that "the world generates conscious beings capable of recognizing reasons for action and belief, distinguishing some necessary truths, and evaluating the evidence for alternative hypotheses about the natural order." We also see "our clearest moral and logical reasonsings" as objectively valid. A world view must account for this confidence. And even though we don't have such a world view, we still go on using such faculties in our everyday lives, constructing theories based on perception, reason, logic. We still know that 2+2=4, even if we don't know exactly how and why we know it. A good theory must explain "the existence of conscious minds and their access to the evident truths of ethics and mathematics." It must have both materialist and rational elements, and everything present now in the universe (including consciousness, perception, desire, action, etc.) must have been somehow inherent as possibilities long before life appeared. And the fact that these possibilities came to be (in the forms of life) would be a significant likelihood (not a vanishingly rare coincidence) given the structure of the universe.
Nagel's own summary: "the respective inadequacies of materialism and theism as transcendent conceptions, and the impossibility of abandoning the search for a transcendent view of our place in the universe, lead to the hope for an expanded but still naturalistic understanding that avoids psychophysical reductionism. The essential character of such an understanding would be to explain the appearance of life, consciousness, reason, and knowledge neither as accidental side effects of the physical laws of nature nor as the result of intentional intervention in nature from without but as an unsurprising if not inevitable consequence of the order that governs the natural world from within. That order would have to include physical law, but if life is not just a physical phenomenon, the origin and evolution of life and mind will not be explainable by physics and chemistry alone. An expanded, but still unified, form of explanation will be needed, and I suspect it will have to include teleological elements."