He believes that materialism fails to explain the most important aspects of human existence and, though he recognizes that theism offers powerful answers, he just can't, or won't, bring himself to believe that there's a God.
Instead he posits a nebulous, mindless purposefulness underlying the cosmos that ultimately gives rise to human consciousness, human cognition, and human values. As I said, Nagel believes that materialism simply can't account for these phenomena and although theism can account for them, he finds the God hypothesis literally incredible. Thus, there must be something immaterial and impersonal that pervades the cosmos and which pushes evolution toward the development of conscious beings who can think and who possess a sense of moral value.
William Carroll examines Nagel's thesis in an article at Public Discourse. Carroll writes:
Can we have a comprehensive view of nature if we do not include an adequate account of consciousness, cognition, and value? Central to the orthodoxy of reductionist materialism is that these features of reality are fully explicable in terms of chemical and physical processes: in some theories they are mere epiphenomena of these processes; in others they are simply dismissed as illusions, shown to be so by the great successes of science.Read the rest of Carroll's analysis of Nagel's book at the link. The significance of what Nagel has written is, in my view, that it's a rejection of materialism by a prominent thinker who is not a theist, and it reveals the deep fissures spreading throughout the edifice of 19th century atheistic materialism.
Nagel, who tells us that he is an atheist, also rejects various forms of theism that appeal to the intentional agency of God to explain the complexities of nature and human nature. The principal focus of his book, as the subtitle indicates, is his criticism of Neo-Darwinian reductionism which, he says, is “incapable of providing an adequate account, either constitutive or historical, of our universe.”
This reductive materialism purports to capture life and mind through an extension of Neo-Darwinian evolutionary theory. “I find this view,” he says, “antecedently unbelievable — a heroic attempt of ideological theory over common sense.” The criticism of materialism is not new; less expected is the criticism of the adequacy of evolutionary biology.
Nagel does not find theism to be more credible as an account of the origin and development of life and intelligence. He is interested in possibilities other than Darwin or God, and he champions a view, “naturalistic teleology,” which he thinks may provide an account of nature that includes mental faculties as constitutive features.
Nagel's hypothesis has about it a whiff of metaphysical desperation. He can see that materialism has no future, but he's determined to avoid a confrontation with God. Thus, he grasps hold of what seems to some to be a very slender and highly implausible reed - naturalistic teleology.