In Chapter 7, Hofstadter embarks on some of his central notions, most central of all is the concept of the "I". The "I" is a concept that has obsessed philosophers for centuries, especially it seems, the idealists, who believed that fundamental to reality were conscious perceptions, the physical world being merely a supposition of the self. The "I" is a transcendental point, a center of perception that itself is not part of empirical world. The analytic philosopher, Wittgenstein, has a famous drawing of the self not being in the field of perception in his Tractatus Logico Philosophicus -- you should check this book out if you haven't read it. The "I", even for idealists is not empirically real, but rather is part of a transcendental reality.
For Hofstadter, the self is an epiphenomena, by that he means a phenomena which is the result of many things occuring at more micro levels, having no reality itself. He relates a story of reaching into a box of envelopes without looking and feeling what he interprets as a marble in the middle of the box. He looks into the box and doesn't see a marble.
"But then, as soon as I grasped the whole set of envelopes as before, there it was again, as solid as ever!"(Hofstadter, pg. 124 Nookbook)
He concluded that there wasn't a marble -- but what was he experiencing?
"It was an epiphenomenon caused by the fact that, for each envelope, at the central vertex of the 'V' made by its flap, there is a triple layer of paper as well as a thin layer of glue. An unintended consequence of this innocent design decision is that when you squeeze down on a hundred such envelopes all precisely aligned with each other, you can't compress that little zone as much as the other zones -- it resists compression." (Hofstadter, pg. 124, Nookbook)
The self is an epiphenomenon like the marble:
"The thesis of this book is that in a nonembryonic, noninfantile human brain, there is a special type of abstract structure or pattern that plays the same role as does that precise alignment of layers of paper and glue -- an abstract pattern that gives rise to what feels like a self." (Hofstadter, pp. 126-127 Nookbook)
Hofstadter says that it is the "collection of desires and beliefs"(pg. 128) that sets behavior in motion; it is "this "I" that is the prime mover", not elementary particles or molecules.
All of this makes a lot of sense to me: the behavior of the zillions of elementary particles add up statistically to conceptual units that are more properly seen as the basis of behavior than the "really existing" particles themselves. This is a very nice move on Hofstadter's part: he shows that the "macro", i.e., "I" level explanation of behavior is more to the point than a reductionist one. The metaphors and analogies he gives early in the book pay off very well here. It is worth reading his notion of "Thinkodynamics" in chapter 2 again.
In Chapter 8, Hofstadter finally defines the Strange Loop.