Nagel argued that there is something it is like to be a bat whereas it does not make sense to say that it is like something to be a stone. Bats, and people, have conscious experience that purely material objects do not have, and it is this conscious experience that is the defining feature of minds. Moreover, this experience is not a fact about the physical realm. Tallis writes:
This difference between a person’s experience and a pebble’s non-experience cannot be captured by the sum total of the objective knowledge we can have about the physical makeup of human beings and pebbles. Conscious experience, subjective as it is to the individual organism, lies beyond the reach of such knowledge. I could know everything there is to know about a bat and still not know what it is like to be a bat — to have a bat’s experiences and live a bat’s life in a bat’s world.Nagel goes on to make the claim, a claim that has put him in the bad graces of his fellow naturalists, that naturalism simply lacks the resources to account for conscious experience. Tallis goes on to say that,
This claim has been argued over at great length by myriad philosophers, who have mobilized a series of thought experiments to investigate Nagel’s claim. Among the most famous involves a fictional super-scientist named Mary, who studies the world from a room containing only the colors black and white, but has complete knowledge of the mechanics of optics, electromagnetic radiation, and the functioning of the human visual system.
When Mary is finally released from the room she begins to see colors for the first time. She now knows not only how different wavelengths of light affect the visual system, but also the direct experience of what it is like to see colors. Therefore, felt experiences and sensations are more than the physical processes that underlie them.
But none of the main features of minds — which Nagel identifies as consciousness, cognition, and [moral] value — can be accommodated by this worldview’s [naturalism's] identification of the mind with physical events in the brain, or by its assumption that human beings are no more than animal organisms whose behavior is fully explicable by evolutionary processes.One might wonder why naturalistic materialists are so reluctant to acknowledge that there's more to us than just physical matter. What difference does it make if an essential aspect of our being is mental? What does it matter if we're not just matter but also a mind? Indeed, what does it matter if we are fundamentally mind?
Perhaps the answer is that given by philosopher J.P.Moreland. Moreland makes an argument in his book Consciousness and the Existence of God that naturalism entails the view that everything that exists is reducible to matter and energy, that is, there are no immaterial substances. Thus, the existence of human consciousness must be explicable in terms of material substance or naturalism is likely to be false. Moreland also argues that there is no good naturalistic explanation for consciousness and that, indeed, the existence of consciousness is strong evidence for the existence of God.
Nagel, an atheist, doesn't go as far as Moreland in believing that the phenomena of conscious experience point to the existence of God, but he comes close, arguing that there must be some mental, telic principle in the universe that somehow imbues the world with consciousness. There is nothing about matter, even the matter which constitutes the brain, that can account for conscious experiences like the sensations of color or a toothache. There's nothing about a chemical reaction or the firing of nerve fibers that can conceivably account for what we experience when we see red, hear middle C, taste sweetness, or feel pain. Nor is there anything about matter that can account for the existence of moral value.
If it turns out that naturalism remains unable to rise to the challenge presented by consciousness then naturalism, and materialism, will forfeit their hegemony among philosophers, a hegemony that has already been seriously eroded.
You can read the rest of Tallis' article at the link. It's very good.