The quandary has led some philosophers back to a view that has actually been around for a long time, the view that somehow every particle of matter contains a tiny bit of consciousness or mind. Mind, in this view, pervades the entire cosmos. This is called panpsychism.
I came across an article on panpsychism written in 2007 by Jim Holt for the New York Times in which Holt lays out the basic problem:
Most of us have no doubt that our fellow humans are conscious. We are also pretty sure that many animals have consciousness. Some, like the great ape species, even seem to possess self-consciousness, like us. Others, like dogs and cats and pigs, may lack a sense of self, but they certainly appear to experience inner states of pain and pleasure. About smaller creatures, like mosquitoes, we are not so sure; certainly we have few compunctions about killing them. As for plants, they obviously do not have minds, except in fairy tales. Nor do nonliving things like tables and rocks.Imagine that, like the images on a computer screen, the physical world consists of pixels embedded in a material substrate. But these are not pixels made of chemicals like those on your monitor, but rather they're pixels made of mind. If you can imagine this you are on your way to grasping the panpsychist hypothesis:
All that is common sense. But common sense has not always proved to be such a good guide in understanding the world. And the part of our world that is most recalcitrant to our understanding at the moment is consciousness itself. How could the electrochemical processes in the lump of gray matter that is our brain give rise to — or, even more mysteriously, be — the dazzling technicolor play of consciousness, with its transports of joy, its stabs of anguish and its stretches of mild contentment alternating with boredom?
This has been called “the most important problem in the biological sciences” and even “the last frontier of science.” It engrosses the intellectual energies of a worldwide community of brain scientists, psychologists, philosophers, physicists, computer scientists and even, from time to time, the Dalai Lama.
So vexing has the problem of consciousness proved that some of these thinkers have been driven to a hypothesis that sounds desperate, if not downright crazy. Perhaps, they say, mind is not limited to the brains of some animals. Perhaps it is ubiquitous, present in every bit of matter, all the way up to galaxies, all the way down to electrons and neutrinos, not excluding medium-size things like a glass of water or a potted plant. Moreover, it did not suddenly arise when some physical particles on a certain planet chanced to come into the right configuration; rather, there has been consciousness in the cosmos from the very beginning of time.This view is not popular among those who hold to a naturalistic metaphysics for the simple reason that naturalists are leery of anything that sounds suspiciously like an attempt to reinsert God back into the universe from which he was banished by modernity, and the panpsychist view certainly swings the gate wide open. Moreover, naturalists are often materialists - i.e. they believe that matter (and energy) are all there is, there's no room for an immaterial substance such as mind in the materialist's world-picture.
Yet the problem of how to explain consciousness haunts the discussion. It's like the elephant in the middle of the room that can't be ignored. Whether the solution turns out to be panpsychism or some version of mind/body dualism, it seems clear that materialism is gently being shoved in the direction of the boneyard of obsolete ideas.
There's more on Holt's article on panpsychism at the link.